The wine industry lowered its guard in the face of the deregulation process that began with Milei

How does the industry take this deregulation process? Cautiously, but well.

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The old laws that Javier Milei repealed

The wine industry was appeased when it felt the elimination of withholdings was a victory. Almost all the businessmen’s energies were put into that battle when it became known that the idea was to tax exports – first at 15% and then at 8%.

That this project has finally been left out of the Bases Law, which already has half the approval of Deputies, was a relief for the sector.

By concentrating on that fight, The analysis of the three industry regulatory laws that Milei repealed was very relegated with their mega DNU at the end of 2023. What did they say and why was there no “scandal”? Simply because in practice they no longer had application.

Martin HinojosaPeronist and president of the National Institute of Viticulture until the new national government took office, explained to ONE Diary that reality: “In fact, two of them were already repealed,” he said about the national wine policy and wine reconversion regulations.

“AND that of wine production contracts gave basic guidelines for the protection of the producer but the delivery of one’s own grapes for the production of wine by a third party was always governed by agreements,” said Hinojosa. “Its repeal did make a bit of noise, but In short, the maquila law, which is still in force, protects the producer“, he said, referring to provincial standard No. 7,101.

In cases is it applied? In most cases it happens when the producer has a surplus of grapes that he has not sold; Then, he hands it over to a winemaker so that he can make wine for it. Whoever does it keeps a good portion of liters and the producer takes the rest.

Hinojosa’s eyes, which in this case look more as a winemaker and producer than as a politician, are not focused on these types of regulations but rather on the agreement on the price of the grapes. Entering May, the industry is focused on this push.

From the Argentine Wine Corporation (Coviar)reaffirmed the explanation about the laws repealed by Milei: “They were regulations that They were not being applied nor do they have a direct impact about viticulture”.

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Deregulation of the wine industry

Beyond those repeals, which ultimately were more of a gesture than true deregulation, that process is underway in Mendoza.

Minister Rodolfo Vargas Arizu, who comes from the business sector, has expressed on several occasions his goal of reducing the pressure of the State on an industry that, in his words, is one of the most controlled.

“In viticulture, from the moment you put the grapes in the bin you no longer own anything. They tell you how much wine you can make, when you have to release it, there are millions of restrictions, we are working to alleviate all that and take pressure off the private sector. “, he said a month ago when the importation of wine by the Peñaflor Group was still making noise among producers.

After that, concrete actions came. Vargas Arizu shares that look of deregulation with his counterpart from San Juan, Gustavo Fernándezand already in a conclave that took place at the headquarters of the National Institute of Viticulture in the middle of last month, it was made very clear that The 2024 agreement was the last Mendoza-San Juan agreement for must and? The Mendoza Government will seek to repeal Provincial Law No. 9,133 sooner rather than later.

The diversification guideline this year was set at 17%. The harvest was very high and by common agreement the authorities of San Juan and Mendoza decided that that percentage be allocated to must and other by-products, such as raisins, fresh fruit, future exports.

At that time (back on February 19), with the INV harvest forecast set at 24% average for the country, it was decided that it was the best way to give a positive signal to the market and not affect the prices they were given. They pay the producers.

But since then it began to be realized that this would be the last. And even after the fact, that percentage was not respected by the private sector neither in Mendoza nor in San Juan.

Now, although it is not shouted out loud, it has already been said in a more formal environment, such as that meeting before the bosses of wine entities – and before the Secretary of Industry and Productive Development of the Nation, Juan Pazo, who was present- so Nobody will be surprised if there is no agreement in 2025.

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From the Mendoza Winegrowers Association They took the news cautiously. “Must is a commodity and the absence of the State will generate competition. If there is free competition to buy grapes to make must, it does not have to harm us,” said President Eduardo Córdoba. “In Mendoza, must is generated out of convenience, because the domestic market demands it and because it is exported,” he clarified, although he did ask that governments sit at the dialogue table with businessmen and producers.

What also slipped is Mendoza’s intention to repeal the Law on Registration of Contracts for the Marketing of Agricultural Productswhich not only applies to the wine industry but also to peaches, plums, olives, garlic and tomatoes.

This rule is from 2018 and in 2020 it underwent modifications but the Government’s assessment is that it did not have the expected effects.

At that time, the regulations were presented as a guarantee for the producer regarding the agreement on prices and payment methods when delivering the merchandise, since before its sanction there were only records that functioned as a statistical system.

However, the Ministry of Production points out that in practice this registration of contracts is very difficult for industrialists to carry out – especially in times of inflation – and that they end up being penalized with fines.