Brazil draws European winemakers after the EU-Mercosur deal promises lower tariffs

Brazil is emerging as a target market for European wine producers as a trade deal between the European Union and Mercosur promises lower tariffs, but industry officials and exporters say success will depend less on treaty language than on pricing, distribution and a better grasp of local demand.

That was the message from a discussion on Saturday, November 7, at the Merano WineFestival in northern Italy, where Brazilian officials, import specialists and wine industry representatives described a market that is growing, competitive and still difficult to navigate.

The appeal is clear. Brazil imports about $561 million worth of wine, according to figures presented at the event, while its wine exports total about $13.8 million. The country also has 965 registered wineries, more than 16,000 products and about 310 million liters declared in production, showing that it is both a producer and a large buyer.

For European suppliers, and especially for Italian producers facing softer domestic consumption and signs of strain in exports, Brazil offers a possible outlet beyond more established destinations. For the broader drinks business, that could mean a way to diversify sales in a major importing market, though any expansion would likely require changes in pricing, product mix and sales channels.

The expected reduction in duties under the EU-Mercosur agreement has added to that interest. Nelson de Andrade, identified at the event as a representative of Brazil’s Ministry of Agriculture, said the agreement strengthens an existing relationship between Brazil and Europe and could open a new phase of development.

Still, speakers cautioned against treating Brazil as an easy answer to weaker demand elsewhere. Marcelo Vargas, described as a producer and retailer, said the market is open but already crowded with thousands of labels. In his view, exporters need a clear strategy built around brand positioning, communication and price rather than assuming shipments alone will create demand.

The discussion in Merano pointed to a shift in Brazilian consumer taste that may work in Europe’s favor. While red wine long dominated, whites, rosés and sparkling wines are gaining ground. Interest is also expanding beyond the best-known Italian appellations, creating opportunities for lesser-known regions if producers can explain their identity and place in a way that connects with local buyers.

Karina de Souza, a WineHunter ambassador for South America who has worked with the Merano WineFestival Brazil initiative, said cultural adaptation is essential. Her argument was that wine cannot be sold in Brazil the same way it is sold in Japan or other export markets, because consumer habits, expectations and retail structures differ. She also said Brazilian importers have already started paying closer attention to Europe, even before the trade agreement’s full effects are felt.

That means timing matters. Exporters that wait for tariff cuts to take effect may find that competitors have already built the relationships that matter most. In Brazil, speakers said, trust with importers and distributors takes time, and success depends on patient work rather than quick market entry.

Competition is also well established. Chile and Argentina remain the dominant foreign suppliers to Brazil, helped by geography and trade ties. Among European countries, Portugal stands out. That leaves room for Italy and other EU producers, but not much margin for error in a market where shelf space, importer attention and end-consumer pricing are all contested.

The obstacles go beyond competition. Brazil’s tax system and bureaucracy remain major concerns for exporters. The event highlighted a new domestic levy, described by participants as a “sin tax,” due to take effect in February 2027. It is aimed at luxury goods, tobacco and spirits, and could also affect wine. If that happens, lower border tariffs under the EU-Mercosur framework may not translate into a much easier path to the consumer.

That tension is central to the commercial outlook. Trade liberalization can improve access, but it does not remove the costs created by internal taxation, complex compliance rules and the challenge of building a national distribution network in a large country. For wine companies, and potentially for other beverage exporters watching the market, the lesson is that demand alone is not enough. Products must reach consumers at a price they will accept and through channels that can support repeat sales.

Helmuth Köcher, the founder of the Merano WineFestival, said consumption patterns in Italy and Brazil now move in opposite directions. He noted that when the festival began in 1992, Italians drank about twice as much wine as they do now, while in Brazil both consumption and attention to quality have been rising.

Brazilian officials at the event also used the forum to encourage investment in the country’s own wine sector, not only imports. De Andrade urged European businesses to see Brazil as a serious market with strong opportunities and strict controls intended to protect quality and safety.

That dual message reflects the nature of the opportunity. Brazil is not just a destination for bottles shipped from Europe. It is a wine market with its own producers, its own regulatory demands and consumers whose preferences are changing. For European exporters, the opening created by the EU-Mercosur agreement may be real, but the market will likely reward companies that treat Brazil as a long-term commercial relationship rather than a short-term fix for weaker sales at home.