Wine Industry Expansion – New Geographical Indication

1. Expansion Program of the Wine Industry

On March 6, 2015, Decree No. 275/2015 was published in the Official Gazette. Said decree ratified the Act of Commitment to continue with the expansion program of the Argentine wine industry (Acta de Compromiso para continuar el programa de expansión del sector vitivinícola), signed by the Ministry of Economy and Public Finance, the Ministry of Agriculture, Livestock and Fisheries, and Bodegas de Argentina AC. Its main objective is to encourage investments in the local wine industry, in particular for sparkling-wine production, in order to improve the sector's competitiveness, promote job creation and strengthen regional economies.

The main provisions of the Act of Commitment are the following:

1. The Ministry of Finance will promote the suspension for a period of one year of the tax established by Law No. 24,674 on the sale of sparkling wines.
2. Bodegas de Argentina A.C. is obliged to invest for the term of one year as of February 1, 2015, an amount equal to 125% of the sum of the Internal Tax on sparkling wines which is not perceived by the Federal Government during that period. This obligation must be completed in a gradual manner and the amount of investments shall not be less than 18 million dollars a month on average.
3. Audit: The compliance of the obligations outlined above will be audited every three months by independent and external auditors from the companies of Bodegas de Argentina AC and by the National Institute of Viticulture (Instituto Nacional de Vitivinicultura). The Ministry of Economy and Public Finance together with the Ministry of Agriculture, Livestock and Fisheries will revise the audit reports.
4. The aim of the investments is to incorporate new technologies in order to improve grape quality, or to improve the productive processes throughout the supply chain.
5. The following wineries,  namely, Chandon, Bodegas y Viñedos Pascual Toso, Norton, Pernod Richard Argentina, Dante Robino y Salentein and Molinos Río de la Plata will act as guarantors of the Act of Commitment and will undertake to make such investments for the amounts unfulfilled by Bodegas de Argentina A.C.
6. Bodegas de Argentina AC undertakes to acquire 5% of its purchases of grape from family farmers and/or cooperatives registered in RENAF (Argentine Register of Family Agriculture).
7. The Act of Commitment will be effective from February 1, 2015 until January 31, 2016 whilst the parties involved fully comply with the aforementioned obligations.

2. GI “Valle de Zonda”

The National Institute of Viticulture (NIV) has issued Resolution No. 4/2015, published in the Official Gazette on April 20, 2015, by which the area known as “Valle de Zonda” was recognized as a Geographical Indication (GI).

Grupo Peñaflor S.A. filed the petition to obtain such recognition.

According to Law 25.163 on GIs for wines and spirits, the INV issued Resolution N° C.23 of December 22, 1999. Such resolution approved the Basic Registry of Geographical and Production Areas that, in view of their specific qualities and characteristics for the production of grapes, may qualify to be recognized as Appellations of Origin and/or Geographical Indications.

Bearing in mind that the geographical area involved is included in the Basic Registry, “Valle de Zonda” was recognized within the limits established in the resolution, as a GI of the Republic of Argentina, located in the Zonda Department, San Juan, according to the following map: