Argentina's once-thriving wine industry is grappling with its most severe crisis in more than 15 years, marked by unprecedentedly low domestic consumption, declining exports and low crop yields.
This stark reality was revealed even as hundreds of wine enthusiasts gathered last week in Mendoza, the heart of the country's wine region, to participate in the annual National Harvest Festival.
The festival, celebrating its 90th year, provided a vibrant counterpoint to the grim statistics. Domestic wine consumption in Argentina is expected to reach an all-time low of 15.7 liters (4.1 gallons) per person in 2025, according to the National Viticulture Institute (INV).
This figure contrasts sharply with that of 1970, when Argentines consumed no less than 90 liters (24 gallons) per person per year. The crisis has already caused the closure of 1,100 vineyards throughout the country and 3,276 hectares of grape production have disappeared from the landscape.
Fabián Ruggieri, president of the Argentina Wine Corp trade group, attributes the decline largely to a “sharp drop in purchasing power” that began in 2023. This trend, he said, is most acute among low- and middle-income consumers who traditionally consumed wine daily.
For Federico Gambetta, director of the Altos Las Hormigas winery, a medium-sized winery in Mendoza, the crisis is aggravated by a change in consumption patterns.
“People are no longer consuming wine en masse,” Gambetta said, noting that consumers are now looking for “consistency” and a sense of purpose behind their purchase.
While older generations preferred high-alcohol and full-bodied wines, younger consumers prioritize other attributes, such as “accessibility, freshness and lightness,” qualities typically found in white and rosé wines.
One of Gambetta's red wines, Malbec Los Amantes 2022, was recently ranked 41st among the top 100 wines in the world. However, he notes that starting in 2010 his winery began modifying its wine, once defined by a traditional, heavier profile, to appeal to a new generation of consumers seeking lighter styles.
“Everything has mutated,” Gambetta said. “If you are not dynamic, you are lost.”
The United States is experiencing a similar shift as the older, wine-focused demographic ages and younger adults fail to fill the void. A Silicon Valley Bank report found that millennial and Gen Z drinkers are spread across more categories and drink less overall, particularly those under 29.
The international market offers little relief. As the world's 11th largest wine exporter, Argentina saw its exports fall to 193 million liters (51 million gallons) in 2025, a year-on-year decline of 6.8% and the lowest volume since 2004, according to the INV.
Ruggieri points out that exports are hampered by financing problems, high logistics costs and lack of competitiveness derived from external tariffs. While its neighbor and wine competitor Chile enjoys free trade agreements with more than 60 economies (often reaching markets like China with tariff rates close to zero), Argentina faces tariffs of between 10% and 20% in most markets.
Local producers like Gabriel Dvoskin, owner of the 10-hectare Canopus winery that produces approximately 50,000 bottles of wine each year, are also battling inflation.
Dvoskin, which exports to 15 countries, with the United States as its main market, recognizes that Argentina's high production costs and rampant inflation put its wines at a disadvantage compared to international competitors.
“Our inflation makes us a little more expensive,” Dvoskin said. “My equivalent in France has a much lower cost of dry inputs (bottles, corks, etc.) than mine.”
For Gambetta, the current crisis reinforces a key lesson for the industry: product quality is non-negotiable.
“Right now, everything is very delicate and one wrong step can bankrupt you,” Gambetta said.
