Argentina’s once thriving wine industry is facing its worst crisis in more than 15 years, with record-low domestic consumption, dwindling exports and low-yielding crops.

Against this sobering reality, hundreds of wine enthusiasts still gathered last week in Mendoza, the heart of Argentina’s wine region, to celebrate the annual National Wine Harvest Festival. Attendees watched dance performances, enjoyed live music and voted for the new queen of the Vendimia festival.

The festival was marking its 90th year as domestic wine consumption in Argentina plummeted to an all-time low of 15.7 liters (4.1 gallons) per person in 2025, according to the National Institute of Viticulture, or INV. Compare that to 1970, when Argentines consumed as much as 90 liters (24 gallons) per person annually.

Furthermore, 1,100 vineyards have shut down across the country and 3,276 hectares (8,095 acres) of grape production have vanished.

Fabián Ruggieri, president of the Argentine Wine Corp trade group, attributes the drop largely to a “sharp decline in purchasing power” that began in 2023. This trend, he said, is most acute among middle- and low-income consumers who traditionally consumed wine on a daily basis.

For Federico Gambetta, director of the Altos Las Hormigas winery, a medium-sized winery in Mendoza, the crisis is exacerbated by a shift in consumption patterns.

“People no longer consume wine en masse,” said Gambetta, noting that consumers now seek “coherence” and a sense of purpose behind their purchase.

While older generations favored high-alcohol, full-bodied wines, younger consumers prioritize other attributes, such as “approachability, freshness and lightness” — qualities typically found in white wines and rosés.

One of Gambetta’s red wines — Malbec Los Amantes 2022 — was recently ranked 41st among the world’s 100 best wines. Yet, he notes that starting in 2010 his winery began to modify its wine — once defined by a traditional, heavier profile — to appeal to a new generation of consumers seeking lighter styles.

“Everything has mutated,” Gambetta said. “If you’re not dynamic, you’re lost.”

The U.S. is experiencing a similar shift as the older wine-focused demographic ages out and younger adults fail to fill the gap. A report by Silicon Valley Bank found that millennial and Gen Z drinkers are spread across more categories and drinking less overall, particularly those under 29.

The international market offers little relief. As the world’s 11th largest wine exporter, Argentina saw its exports fall to 193 million liters (51 million gallons) in 2025 — a 6.8% year-on-year decline and the lowest volume since 2004, according to INV.

Ruggieri notes that exports are being hampered by financing issues, high logistics costs and a lack of competitiveness resulting from external tariffs. While its neighbor and wine competitor Chile enjoys free trade agreements with over 60 economies — often reaching markets like China with tariff rates close to zero — Argentina faces tariffs between 10% and 20% in most markets.

Local producers like Gabriel Dvoskin, owner of the 10-hectare Canopus winery that produces approximately 50,000 bottles of wine each year, also struggles with inflation.

Dvoskin, who exports to 15 countries, with the U.S. as his main market, acknowledges that Argentina’s high production costs and rampant inflation place his wines at a disadvantage compared with international competitors.

“Our inflation makes us a bit expensive,” Dvoskin said. “My equivalent in France has a much lower cost for dry inputs — bottles, corks, etc. — than I do.”

For Gambetta, the current crisis reinforces a key lesson for the industry: product quality is non-negotiable.

“Right now, everything is very delicate, and one wrong step can bankrupt you,” Gambetta said.