Report Highlights: 

Peru’s wine imports in calendar year (CY) 2009 reached some 7.3 million liters (~$20 million). In CY 2013, imports have grown to 8.7 million liters (~$34 million). While imports in terms of volume have grown with a compound annual growth rate (CAGR) of nearly 4.5 percent; we see greater growth potential in terms of value where imports have grown with a CAGR of over 14 percent. At FAS Lima we attribute stronger growth in terms of value to the market trending toward higher-value wines. Consumers’ palates have increasingly become more sophisticated, moving toward the better-quality wines.

General Information: 

Peru with a population of 30 million (Central Intelligence Agency, July 2014 est.), represents an interesting potential export market for U.S.-origin wines. At FAS Lima, we find that the local wine market has benefitted from the country’s strong economic growth over the past five years. Peru’s national statistics institute (Instituto Nacional de Estadísticas e Información – INEI) reports that the country’s gross domestic product (GDP) expanded by 5 percent in 2013; GDP is expected to grow by 5.5-5.6 percent in 2014. 

For over a decade Peru has been one of the world’s top performing economies; registering sustained high growth accompanied by low inflation (estimated at 2.8 percent in 2013 and forecast at 2.5 percent in 2014). Peru, a middle-income-level country, has per capita GDP of over $12,000 in purchasing power parity (PPP). Over 77 percent of the country’s inhabitants live in urban areas; with the rate of urbanization growing by 1.6 percent per annum (2010-15). 

FAS Lima understands that Peru’s wine market supply is roughly 45 million liters, up by some 10 million liters compared to five years ago. We find at the same time that consumers’ palates have increasingly become more sophisticated, moving toward better-quality wines. Foreign suppliers are already present in the market offering a wide variety of wines at different price ranges; Argentine and Chilean wines however dominate store shelves. 

Peru’s wine imports in calendar year (CY) 2009 reached some 7.3 million liters (~$20 million). In CY 2013, imports have grown to 8.7 million liters (~$34 million). While imports in terms of volume have grown with a compound annual growth rate (CAGR) of nearly 4.5 percent; we see greater growth potential in terms of value where imports have grown with a CAGR of over 14 percent. At FAS Lima we attribute stronger growth in terms of value to the market trending toward higher-value wines. 

The Ministry of Finance in 2013 raised the excise tax for alcoholic drinks (including wines). This revenue seeking measure applies to both foreign and domestic products. It includes a two system approach based on volume (fixed) and value (sales price). We find that this measure has adversely affected more the lower-priced products on which the tax is applied based on volume. 

Market Features 

• Growing domestic demand, along with rising household income, is fueling wine consumption growth. 

• Wine is benefitting from Peru’s increasingly sophisticated cuisine, allowing consumers to try new food and wine pairings. 

• The expansion the retail food channel in Lima, as well as in the provinces has been instrumental for wines reaching new consumers. 

• The U.S- Peru Trade Promotion Agreement grants U.S.-origin wines duty-free access. 

Key Importers 

Fifty percent of Peru’s wine market is controlled by two large importer-distributor groups; Yi Chang and Perufarma. Yi Chang currently represents California-based Ernest and Julio Gallo brands, whereas Perufarma represents Argentine (e.g., Navarro Correa) and Spanish (e.g., Marquez de Riscal) labels. 

Other large importer include Drokasa Licores, LC Group, Premimum Brands, and KC Trading