Interview with Dr. Jorge Heine, Chilean Ambassador to India (Part 2)

The phenomenal growth in the popularity of Chilean wines in India owes a lot to Dr. Heine who gets personally involved in any event promoting Chilean wines. The latest ‘Top Chile Wine Fest 2006' has seen him get into the minute details besides offering his total support. In the concluding Part, Subhash Arora quizzes him some more ABOUT Chilean wines and how Chile has become a strong wine exporting nation.

“El Niño” effect caused the wines to be diluted in 1998. Has it still left any mark on the quality? How susceptible are you to this phenomenon?

The Humboldt Current, a cold current originating in Antarctica, which goes up along all of Chile's coast, has a considerable effect on Chile's climate. It makes for a lower temperature than the country would otherwise have (Chile's wine growing region is located between 32 and 38 degrees latitude, which corresponds roughly to what in the Northern Hemisphere would be Southern Spain and Northern Africa, but the average temperature in Central Chile is lower than there). “Corriente del Niño” is the name of a current in form of an irregular flow of hot water originating from the North which comes up around Christmas about every ten years. It alters the climatic conditions in the coastal regions of Northern South America, but has sometimes reached Chile as well. This affected the wine production in 1999, due to the cold spring and humidity of 1997 that influenced the leaf buds, as well as the extreme dryness of the winter and the spring of 1998. It influenced the volume produced, which went down from 5.4 million hectolitres to 4.6 million, but not the quality, because there was no fungus and the wines of that year turned out to have a high content of alcohol, strong flavours and ripe tannins.

How would you rate the recent vintages of relevance, say 2000 to 2005?

The year 2003 was exceptional as there was a long, sunny and dry autumn, which favoured the quantity as well as the quality of wine.

It is generally said that Torres' entry into Chile in the seventies was a historic landmark in terms of your wines. Do you agree with it?

Yes. The arrival of Miguel Torres in 1979, the year in which he bought some land and established a vineyard in Curicó, in Chile's Seventh Region, marked a radical change in the industry. Mr Torres gave a tremendous impetus to the introduction of latest technologies: Stainless steel casks, pneumatic presses, temperature regulators of fermentation and a suitable cold chain.

Are there any laws set by the government or the wine makers to define the control of quality and other aspects of winemaking in Chile?

Law 18.455 of 1985 fixed some norms for the production, elaboration and commercialisation of alcoholic beverages. To that we should add, Decree Law 464 of 1994 that lays down norms with respect to the establishment of wine and grape growing zones, norms regarding the “ Appellation of Origin”, indications regarding varieties and vintage year, in addition to other factors relevant to the commercialisation and labelling of wines. Both of these laws have been key to keep up the quality of the Chilean wines

Is it true that the Chilean producers import a sizeable amount of grapes from Argentina, convert it into wine and export it?

Chile is a country free from many types of pests, including the fruit fly (medfly). Most other countries are not. To do that would be shooting ourselves in the foot. It is not happening. Being the world's no.1 exporter of grapes, we have plenty of our own.

Again, with so much experience and history behind them, how is it that Chile could not elevate itself into producing fine wines like USA and Australia?

Chile produces high-quality wines; in many cases better than those of the countries you mention, though our marketing has probably not

been as good as theirs, and we have not had the wine writers that the English-speaking world has. Our country differentiates itself by selling good wines in a price range of US$ 4 per bottle in United States of America or for 3 pounds sterling in England. This is delivering the best combination of quality and price. Nevertheless, Chile is starting to move up the value chain, crossing the US$ 10 threshold, that marks the limit between premium and non-premium wines. The average price of our wine exports between January and July has gone up by 20%.

Chile is now the fifth largest exporter of wines, running closely behind the fourth largest Australia.. With its higher growth rate than Australia when do you expect Chile to displace it?

Chile has one of the highest growth rates among wine exporters, comparable only to Australia's. Our exports have had an average annual growth of 22%, starting from US$ 51 million in 1990 to US$ 835 million in 2004.The industry had initially aimed at reaching U$ 1 billion in exports in 2010, but it looks like we will reach that a lot earlier, and we are revising our projections upwards, aiming for U$ 1.5 billion by that year. We also export 75% of the wine we produce, the largest such share in the world.

What lies behind this mammoth growth in the production and export of Chilean wines?

Chile has optimal conditions for growing wine (John Platter, South Africa's leading wine critic, once described it as “a hothouse where God

forgot to put the roof”) and for a long while we simply did not make the most of them. With the right public policies in place, and the massive investment in the latest technologies, we now have the perfect combination between grape growing and wine making.

Apart from enjoying optimal climatic, topographic and soil conditions for wine making, the success of the Chilean wine industry has to be set within the broader context of Chile's export-led development strategy. Chile has increased its exports four-and-a-half times since 1990, from U$ 9 billion to a projected U$ 40 billion in 2005, and although wine makes up for less than 3% of this, it is our most visible export product. It has also applied much the same strategy of the rest of our export sector—to diversify not only our products (and we are now moving from such traditional varieties as Cabernet Sauvignon, Merlot, Chardonnay and Sauvignon Blanc to newer specialities like Carménère, our flagship wine now, as well as lesser known varieties like Carignan, Gewurztraminer, Cabernet Franc and Viognier, as well as to blends like Caballo Loco by Valdivieso, which has been so popular in India, but also to other markets.

We are selling close to U$ 40 million in wine a year to Japan. We believe the Asian market holds great potential, although our main markets continue to be in Europe (Europe is the biggest one, with 59% of our export share, and North America comes second with 20%). The fact that the UK, our biggest single country export destination, allowed the sale of wines in supermarkets also helped. Finally, the timing was right.

Our products came on the market precisely at the moment studies documenting the benefits of the so-called “Mediterranean diet”, which includes drinking wine regularly, were popularised, and people realised that by drinking wine they could live longer.

Could you please elaborate on that a bit more?

In USA, Dr Curt Ellison and Dr Serge Renaud made public their findings that the lower mortality rate in France from cardiovascular diseases, which is a third of what it is in the United States, could be traced back to the specific features of their diet, and especially to the daily consumption of 300 to 400 ml of wine. This was in 1991, when it triggered a worldwide interest in the benefits of regular, moderate consumption of wine, especially reds.

Subsequent findings from a 2001 University of Glasgow study, which analyzed 65 red wines from a dozen countries, establishing that Chilean

reds-Cabernet Sauvignon, Merlot and Pinot Noir had a significantly higher number of flavonoids, the key protectors of good health, than the wines from elsewhere. They attributed this to the quality of the climate in Chile where the grapes ripen fully in the sun before the harvest, and to the modern technology and winemaking techniques used.

What would be the defining moment for this change?

First, the 1979 arrival of Miguel Torres, who dared to invest in Chile and to show our wine producers the latest technology, would be one of the turning points. Between 1987 and 1993, some 10,000 hectares of vineyards were planted. Companies such as Santa Rita bought 7000 barrels of American and French oak, leading to a substantial upgrading in the quality of their wine making.

It was in this period that the dramatic shift from producing mostly for the domestic market to the much more demanding world market took place. From exporting 10% of

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