Brazil opportunities beckon

Brazil opportunities beckon

Since then, Gastin's career has taken him around the world, but he's always kept an ongoing interest in Brazil - made easier when he gained a daughter-in-law from Brazil.
His company, INSTATE, set up to provide strategic advisory and marketing services for Australian and international firms and institutions, now includes a Brazil office.
'Brazil and Australia really aren't that different in many ways - they share common themes in environment, agriculture and climate, among others,' Gastin said.
In April, Gastin in collaboration with INSTATE, Wine Australia and Winetitles (the publisher of the Grapegrower & Winemaker) - will be leading a study mission to Brazil, with the aim to expand the industry's knowledge and eventually encourage greater wine export opportunities.
The trip, which takes place from 21-28 April, has two main objectives: to assess the market potential for Australian wine, and to examine possibilities for collaboration between the Brazilian and Australian wine industries.
Participants will visit major cities and wine regions across Brazil as well as attend the country's major wine trade show, Expovinis Brasil 2012, in Sao Paolo.
'The program includes targeted visits to various retail and on-premise outlets for wine in major cities, and contact with the trade and wine media,' Gastin said.
Opportunities
Gastin says Brazil is experiencing growing domestic prosperity and, with it, the social and economic environment that favours a growing wine consumption. This is also a factor of a rapidly appreciating exchange rate, which is making imports much cheaper.
'Sparkling wine is their [Brazil's] biggest domestic wine category. Its wine market and consumption is developing, and there is room for new players,' he said.
Gastin is adamant the trip is not just about selling wine. He says it's about taking the first step in a better, bigger and, one day, mutually beneficial relationship.
'The universal rule of winemaking is the first wine most people get to know and love is the local wine. If the local wines are good, they will search out what else is out there. If it's bad... They'll often turn away and move to something else to drink.
'If Australia can position itself in such a way - by lending support and expertise to its less developed domestic wine industry - then I think we can develop the relationship so that the next logical wine to taste, after their local wine, is Australian.'
The largest exporters of wine to Brazil are Chile, Argentina and Uruguay. Gastin says the relationship between the neighbours isn't a particularly close one, influenced by immense competition and some cultural clashes.
'It may seem to many that there is a pre-existing sympathetic relationship to compete against but, the truth is, most Brazilians would look forward to alternative options and relationships.'
'I want to see interested exporters learn the country from the inside out - what turns them on, get them aware of who we are and then we can position the product to its best potential.'
Obstacles
Though opportunities exist, Gastin admits there are also obstacles that come with this new wine market.
'There's no doubt there are some existing trade barriers, but the idea of this trip is to learn what they are and how to deal with them,' he said.
Thecomplications include compliance, governance and unique importer contract arrangements.
Wine Australia list five main problem areas for Australian importers:
• tarriff (currently set at 20 per cent) and non-tarriff barriers, such as mandatory import certification, certificate of origin and product registration for Australian wines
• there's preferential treatment for members of the common union market of MERCOSUL, i.e., Argentina, Uruguay, Paraguay and Venezuala
• there are cultural ties to Portugal, Spain, Chile and Argentina
• consumer allegiance to the domestic, South American and Portuguese wine industries
• Australia's very small footprint - exporting just 700,000L in the 12 months prior to August 2011.

Export experience
Graeme Shaw, from Shaw Vineyard Estate in the Canberra wine region, recently teamed up with a new distributor to Brazil and sent his first six mixed bottles in early 2011.
'It's been a long, drawn out process and, believe it or not, the bureaucracy and licensing is worse than the UK, US and even China,' Shaw said.
Shaw estimates he has spent close to $2000 on meeting the various wine tests needed to enter the market, and it has taken considerable time and effort to get the right wording on an additional back label in the official Portuguese language. He is persevering and takes comfort in the new focus on Brazil from Wine Australia.
'If [the new focus] can help simplify the process, it will be a great help for everyone,' Shaw said.
D'Arenberg has been exporting its wine to Brazil for 10 years, and sales and marketing general manager Philip Jeffries agrees that the paperwork and compliance can be time consuming.
'It's one of 60 countries d'Arenberg export to and not the worst in terms of compliance, but it's critical to have the right support network in place and experienced staff to get it all done,' Jeffries said.
'Shiraz is by far the biggest variety we export to Brazil. We send a mix of the entry level wine, such as Stump Jump, and a smaller selection of the mid- to premium labels, such as Footbolt and Dead Arm.'
Jeffries says, in the 10 years d'Arenberg have been in the Brazil market, they have seen a significant rise in middle-class wealth - and they're confident it is a market that will rise in importance for Australia.
'It's not a market for short-term gain. The decision was made to invest in this market, but it's a long-term investment with the aim to tap into some of that growing wealth and increase our mid- to premium brand numbers.'
Wine Australia has said it plans to meet with regulatory authorities in March to begin discussions regarding current trade barriers.


Trip details
Dates: Sat 21 April - Sat 28 April 2012
Destinations: Sao Paulo - Porto Alegre - Bento Goncalves - Vale Dos Vinhedos
Cost: $5154 twin-share (additional $1138 for single supplement)
This cost includes hosting, appointment/meeting facilitation, translations, daily itinerary, internal flights within Brazil, all accommodation, breakfast, coach transport and airport transfers.
Lunch, dinner, drinks, insurance, visas, international airfares, taxis and other ancillary costs are not included.

Optional side trip A:
Date: Sun 28 April - Tues 1 May 2012
Destination: Rio de Janeiro, with a special market focus.

Optional side trip B:
Date: Wednesday 18 April - Sunday 22 April 2012
Destination: Mendoza (Argentina) and Chile, with a special vineyard/winery and production focus.
Bookings: Must be made before February 28, 2012. For itinerary, bookings or flight enquiries, and to register your interest in optional side trips, contact: Anne Martin,
c/o Travelplan Australia on email: amartin@travelplan.com.au or phone: (03) 9591 580

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