Chilean Producer Concentration Unique Among New World Countries

The Kingston Family Vineyard cases referred to the high concentration of Chilean wine production among the three largest: Concha y Toro, Santa Rita, and Compania Cervercerias Unidas. Together, those three producers controlled 80%+ of total volume and have a significant impact on the Chilean wine industry.

However, Chile stands out among New World countries regarding sits concentration. The table below shows the concentration of each of the top three producers in six New World countries:

While Chile’s market share of the largest winery is in-line with other countries, the market share of the second and third largest stand out as huge outliers. Based on this data, no other country is above 53% of market share among the top three producer while Chile stands at ~90%.

This concentration has business implications for all facets of the economic value chain (suppliers, wineries in each country, buyers etc.) as well as the ability to change and re-position a country's reputation on the global wine landscape. Chilean wine, for the most part, is and will be driven by these three wineries and their owners. It is harder for boutique vineyards such as Kingston to really break out at scale. In lower concentration countries such as South Africa, it is likely easier to establish a newer wine brand as a producer or change the narrative for the country’s reputation as a whole.

Data Source:
The Palgrave Handbook of Wine Industry Economics (pg. 210); 2019.