Advice on exporting wine to Colombia

Friday, 25. August 2017 - 12:15

Bogota, Colombia/WikiCommons/Pedro Szekely

An interview with Brent Shortridge,  managing partner, Anders-Lane Artisan Wines (California)

Colombia first appeared on my radar in 2009. I was approached by a Colombian importer who was anticipating a free trade agreement between the US and Colombia, and shopping for potential brands to represent. It was flattering to have interest from Colombia, but little did I know that the journey would have so many challenges. The agreement – enacted in 2012 – subsequently levelled the playing field and eliminated duties on US wines; we were now in the same situation as wines from Chile. Ahead of the free trade agreement, my brands also benefitted from an unfortunate earthquake in Chile that destroyed trade routes to Colombia.

However, brands should never expect an easy ride in Latin America; Colombia is a challenging country to do business in. Registrations move slowly, as the government is on vacation frequently; whenever I press for answers, I am reminded, “This is Colombia.” In fact, the biggest challenge for a brand is the registration process – it can take up to a year to get products registered. There are fees, reports, analyses; it all adds up in terms of time and investment. For many brands, this is a significant hurdle.

Therefore, wine imports have been historically concentrated from countries of origin with advantageous trade agreements, so the market is saturated with wines produced in South America. High import duties positioned Californian wines at prohibitive price points when I first looked into the market. Today the overall wine market in Colombia is probably pretty stable, but the opportunities for growth have been directed towards wines from countries that were previously restricted by high duties. But equally, this is a country that is hard to predict. While the free trade agreement helped lift our sales, the Colombian government has used importer-directed taxes and a recent VAT tax to make up for lost revenue and suppress sales. The most recent VAT on alcohol has created some barriers.

It is also worth noting that the number of Californian brands active in Colombia remains pretty small. I have benefitted from the great interest in Californian wines by Colombians as a result. Overall, I am very happy with my brand’s performance in the market, measured by placements in prestigious accounts and acceptance of my wines. (Cont. below)

Brent Shortridge

In terms of key geographical targets, the major cities such as Bogota or Medellín have large populations and a healthy demand for wine. In addition, there are tourist markets, such as Cartagena, that bring in a high volume of luxury tourists with an affinity for premium wine.

Yet wine is sold effectively in all areas of Colombia, and for wines of Californian origin the retail section for US wines is usually hard to find, as wines from South America and Europe dominate the shelves. I see more of our business moving to independent retail accounts or online merchants, and restaurants play an increasingly important role in moving our products.

My advice to brands considering entering this market is thus: research market conditions, understand the length and cost of registering brands, and analyse your tolerance for such. Colombia demands patience and stamina. Moreover, there is always the underlying risk of the rather capricious nature of the current government, as well as the traditional slow-pay of the market. Yet it does have several nice surprises: a rich culture, great coffee, great food, and relative safety.
As told to James Lawrence