Argentina’s Wine Industry Faces Crisis Amidst Vendimia Festival

Despite a vibrant celebration of tradition at the annual National Wine Harvest Festival (Vendimia) in Mendoza, Argentina’s wine industry is grappling with a significant crisis marked by declining domestic consumption, falling exports, and challenging economic conditions.

A Celebration Against the Odds

Hundreds of wine enthusiasts gathered last week in Mendoza to partake in the 90th annual Vendimia festival, featuring dance performances, live music, and the selection of the new festival queen. This celebration of Argentina’s wine culture unfolded as the industry confronts a sobering reality.

Plummeting Domestic Consumption

Domestic wine consumption in Argentina has reached an all-time low of 15.7 liters (4.1 gallons) per person in 2025, according to the National Institute of Viticulture (INV). This represents a dramatic decrease from 1970, when consumption averaged 90 liters (24 gallons) annually.

Vineyard Closures and Production Losses

The crisis has led to the closure of 1,100 vineyards across the country and a loss of 3,276 hectares (8,095 acres) of grape production.

Economic Factors and Shifting Consumer Preferences

Fabián Ruggieri, president of the Argentine Wine Corp trade group, attributes the decline primarily to a “sharp decline in purchasing power” beginning in 2023, disproportionately affecting middle- and low-income consumers who traditionally consumed wine daily.

Federico Gambetta, director of Altos Las Hormigas winery, highlights a shift in consumer preferences. Consumers are now seeking “coherence” and purpose in their purchases, favoring wines with “approachability, freshness and lightness” – qualities often found in white wines and rosés – over the high-alcohol, full-bodied wines favored by older generations.

Adapting to a Changing Market

Altos Las Hormigas has adapted its wine production since 2010, shifting away from a traditional, heavier profile to appeal to the preferences of a new generation of consumers. Gambetta emphasizes the need for dynamism in the industry, stating, “If you’re not dynamic, you’re lost.”

Global Trends and Export Challenges

Similar shifts in wine consumption are occurring in the U.S., with an aging wine-focused demographic not being fully replaced by younger adults. A report by Silicon Valley Bank indicates that millennials and Gen Z drinkers are diversifying their beverage choices and consuming less alcohol particularly those under 29.

Argentina’s wine exports fell to 193 million liters (51 million gallons) in 2025, a 6.8% year-on-year decline and the lowest volume since 2004, according to INV. Exports are hampered by financing issues, high logistics costs, and tariffs. While Chile benefits from free trade agreements with over 60 economies, Argentina faces tariffs between 10% and 20% in most markets.

Inflation and Production Costs

Local producers, like Gabriel Dvoskin, owner of Canopus winery, struggle with Argentina’s high inflation and production costs. Dvoskin, who exports to 15 countries including the U.S., notes that his costs for inputs like bottles and corks are significantly higher than those faced by competitors in France.

The Importance of Quality

Gambetta stresses that maintaining product quality is paramount during this challenging period, stating, “Right now, everything is very delicate, and one wrong step can bankrupt you.”