Argentina Ends Mandatory Wine Levy

The Argentine government has ended a mandatory contribution that wineries and grape producers had paid for more than two decades to finance the country’s wine promotion agency, setting off a sharp dispute with part of the industry over how the sector should be organized and funded.

The measure, published in the official gazette and confirmed by Agriculture Secretary Sergio Iraeta, gives the system three months to be dismantled and requires a final accounting of how the money was used. From now on, the Corporación Vitivinícola Argentina, known as Coviar, will no longer receive public national funding and will have to rely on voluntary contributions from its members.

The decision was also promoted by Federico Sturzenegger, the minister of deregulation, who described the old arrangement as a burden on producers and said it had taken about $300 million from the sector between 2004 and 2025 without delivering the expected results. He argued that the state should not be embedded in winery operations and said the change would remove what he called redundant controls and an obligatory charge that hurt competitiveness.

Coviar was created in 2004 under Law 25.849 to coordinate promotion and development across Argentina’s wine industry. Under that framework, all wineries and producers were required to pay fees on each liter produced, bottled or sold, as well as on each kilogram of grapes processed. The money was meant to support the Strategic Wine Plan 2020, which aimed to place Argentina among the world’s leading wine producers and lift exports to $2 billion a year by 2020.

For critics of the system, those goals were never met. Bodegas de Argentina, a trade group that represents more than 200 companies, welcomed the end of mandatory payments and said the original plan had run its course. The group said the new rule marked an important step toward modernization and competitiveness and argued that Coviar should now operate like any other business association, financed only by voluntary dues.

The dispute reflects a long-running split inside one of Argentina’s most important agricultural industries. Coviar has managed domestic and foreign promotion programs, sustainability certifications and profitability initiatives with a structure backed by mandatory private financing and participation from national and provincial actors. Opponents have repeatedly accused it of spending funds without enough transparency or measurable impact.

That criticism intensified last year. In August 2025, Bodegas de Argentina said Coviar had wasted $230 million over 16 years and backed legislative efforts to eliminate the entity. The new rule does not dissolve Coviar or strip it of legal status, but it sharply reduces its financial base and leaves its future dependent on whether wineries choose to keep supporting it.

The change comes at a difficult moment for Argentine wine. Domestic consumption has been weak for years, exports have struggled to regain momentum and producers face higher costs, inflation and logistical pressures. According to data cited by the Center for Political Economy Argentina, viticulture spans 20 provinces, but Mendoza accounts for 71.4% of planted acreage, 78% of wine production and more than 52% of grape must output.

Export figures show how fragile the sector remains. In March 2026, Argentine wine exports totaled $57.4 million. Varietal wines accounted for $51.3 million of that total, while non-varietal wines brought in $4 million and sparkling wines $2.1 million. Overall export value rose 9% from March 2025, but much of that increase came from bulk wine shipments, which grew 51.2% in volume while generating only modest gains in value.

For all of 2025, exports fell 7.2% in dollar terms to $661 million, their lowest level since 2009. Volume dropped to 1.93 million hectoliters, the weakest figure since 2004 according to Argentina’s National Institute of Viticulture. The main destinations remained the United States, Britain, Brazil, Canada and Germany.

At home, sales showed only a limited recovery. In March 2026, domestic wine commercializations reached 60.3 million liters, up 8.4% from a year earlier, helped by gains in non-varietal wines and sparkling wines even as varietal wines declined. For the first quarter of 2026, internal sales rose just 1.5% year over year.

The broader backdrop is a global wine market under pressure from changing drinking habits, inflation and lower demand for higher-alcohol beverages. For Argentina’s industry, which still ranks among the world’s largest producers at roughly 1 billion liters a year, the debate over Coviar has become part of a larger question: whether the country should keep relying on centralized promotion structures or move toward a looser model shaped more directly by market forces.