In Argentina, small vineyards to get a boost

MENDOZA, Argentina — Tourists, merchants and sommeliers from high-end restaurants in the United States and Europe are flocking to Argentina's winemaking region, where export sales are soaring.

But the windfall has not reached many smaller vineyards in this Andean region.

This year one of the wineries of the Furlotti family, a once-prominent name in the long history of winemaking in Argentina, will produce the country's first "fair trade" wine with grapes provided by a coalition of small growers.

The pilot project will give disadvantaged producers the resources to access potentially lucrative foreign markets. And they will be guaranteed a fair price for their grapes.

"I think this could be a big change for the small producers, but also for society at large," said Gabriela Furlotti, whose family has owned its winemaking estate for 70 years and is lending is facilities to the fair trade operation.

"If we help the small producers to maintain their wineries, making them more productive in terms of quantity and cost, then their lands won't be parceled off and their aged vineyards of 100 years broken up," Furlotti said.

Fair trade commodities, such as Mexican coffee and bananas, Ghanaian chocolate and Indian teas, are growing in popularity among socially conscious consumers worldwide.

Though such products have been popular in Europe for many years, interest in the United States has begun to boom recently, as large retailers try to distinguish themselves as responsible corporate citizens.

The fair-trade designation — approved by the Fairtrade Labeling Organizations International, a Germany-based alliance that sets ethical work standards — promises that the farmers or producers receive a fair price, at least enough to feed their families.

The company purchasing the wine will provide financial and technical assistance and other help to the growers. It will also invest a portion of the money in the community for health care, education, job training and other social programs.

The consumer pays the difference. Fair-trade products can range from a few cents to three times higher in price than competing products.

Large chains such as Starbucks and Dunkin' Donuts offer fair-trade coffees, and natural food stores such as Wild Oats offer bananas and other products identified by a special label.

"The U.S. market is really the market with the most dynamic potential for the fair-trade movement right now," said Doug Murray, co-director of the Center for Fair and Alternative Trade Studies at Colorado State University.

The consumption of fair-trade roasted coffee — which makes up almost 2 percent of the overall market — grew 92 percent from 2002 to 2003, according to Transfair, the only certifier of fair trade products in the United States. A number of other fair trade commodities such as tea, cocoa, fresh fruit and sugar also are growing in popularity.

Wine is a fairly new addition. Currently, two wineries in Chile and three in South Africa are fair-trade certified. But vendors say those wines, which cost about $10-12 a bottle in Britain, are selling well. For example, the Co-Operative Group, a consumer co-operative in the United Kingdom, sold about 100,000 cases — or about $10 million — from Chile and South Africa in 2004.

The Mendoza small growers and producers hope their project will capitalize on the growing demand for socially responsible products and for their specialty, a fruity, robust red wine made from Malbec grapes.

"The Fair Trade stamp guarantees that the product helps the producer in the third world," said Patrick Struebi, managing director of Fairtrasa Mexico. His trade organization, which has worked with avocado growers in Mexico, is helping to organize the Mendoza wine producers. "Consumers will pay as much as 30 percent more for the product, but with the label you guarantee that your funds will get here." The fair-trade movement has its skeptics.

The Wall Street Journal last year reported that some retailers were jacking up prices for bananas from the Dominican Republic for example, without passing on the profits to producers.

But supporters say that the benefits of guaranteeing market prices to small producers outweigh the risk of a few businesses taking advantage of the system.

Struebi estimates that 20-30 producers will be involved in the pilot project in Argentina. The approximately 70,000 bottles they plan to produce each year will not be available until the beginning of 2006, first in Europe.

The wine will cost about $15 a bottle, and will be called "Soluna," meaning the combination of sun ("sol" in Spanish) and moon (luna).

The name "mirrors the union of two polarities in one word," Struebi said, "reflecting a fair and harmonious trade relationship between first and third-world countries."