By Patrice M. Jones
Tribune Foreign Correspondent

SANTIAGO, Chile -- In this sun-drenched mountainous region, international tourists come by the tens of thousands every year to walk around the leafy, green
vineyards of Concha y Toro with wine glass in hand.

They learn a little bit about the century-long history of Chile's largest winery. And, of course, they taste what has been called some of the best wine being produced
among the fast-growing vintners that dot the globe from Australia to Uruguay.

In fact, a host of so-called "New World" wines--from countries like New Zealand, Argentina and South Africa, as well as Chile--are even giving grand dame of the
wine industry, France, a run for its market share. Chilean cabernets and merlots have become a fixture in the United States, Northern Europe and even Asia.

For Latin America, after a decade of on-and-off recessions, Chile's wine industry has evolved into a model of aggressive growth, bucking the odds since 1990.

The industry provides what some analysts say is a symbol of how Chile and its neighbors can diversify traditional export offerings and cushion themselves against
economic cycles.

Wine joins a host of niche industries in Chile that are being cultivated to beat the fickle global market as concerns about external economic shocks--from Argentina's
economic collapse to the slowdown of the U.S. economy--have gripped nations throughout the region.

"Our wine industry is a wonderful economic phenomenon," said Rodrigo Alvarado, general manager of Chilevid, the smaller of two main wine associations in Chile.

While value-for-the-money marketing and wider distribution have helped propel the 10-fold increase in Chilean wine exports, the key to its success is quality, said
Alvarado. "Without a good product, it is impossible to make the progressive amount of sales that we have."

Concha y Toro alone hit an impressive milestone when it became the United States' No. 1 imported brand of wine in 2000, part of total Chilean imports of $134
million worth of wine sold to the U.S. that year.

Overall, Chilean wine sales abroad have increased worldwide from less than $52 million in 1990 to nearly $600 million in 2000. That growth, in turn, has attracted a
wave of direct foreign investment from France, Spain and the United States.

Experts here say Chile's financial success starts with its climate--among the world's best conditions for winemaking, some say. This isolated region between the
Pacific Ocean and the Andes also has low-cost irrigation that helps ensure what industry experts say is a consistently good harvest.

Savvy planning

The industry has been aided, too, by savvy planning as experienced foreign companies form partnerships with domestic firms. California's prominent Robert Mondavi
Winery, for instance, launched a joint venture in 1996 with Vina Errazuriz of Chile, a family that has been producing wines since 1870.

Concha y Toro also has a high-profile partnership with French brand Baron Philippe de Rothschild and has launched an Internet site and an associated retail outlet
that promotes the company's products.

"We like to say we don't have good and bad years in the wine industry here, since every year is a good one because of the climate and because the low cost of our
wines traditionally have made them very competitive," said Sebastian Lopez, spokesman for Concha y Toro.

Getting recognition for the quality of Chile's wines is tough, though. "We are fighting to get to the point when Americans have a special night or a celebration, they will
choose our premium wine instead of a French, California or Italian premium wine," Lopez said. "We feel we have the quality, so we are increasing our marketing."

Increased spending on marketing is one of the main tools for tackling the next frontier for Chile's wine industry: the premium wine market.

Higher-end wines

Known for wines in the $7 to $10-a-bottle range, Chile has been pushing to sell higher-end products in the major markets and, strangely, the depleted ozone layer in
the earth's atmosphere might help.

Noting that the "ozone hole" as it is called, stretches over Antarctica and Chile, the wine companies say that unfiltered sunlight gives the Chilean grape more
antioxidants, something research shows is healthier and beneficial for the heart.

Chile also signed on in December to a five-nation agreement with the United States, Canada, Australia and New Zealand to allow freer trade between the nations,
which is expected to boost exports.

But trying to court the premium market may be difficult.

"The wine market is getting even more competitive because of the large supply of wine all around the world," said Karen Ross, president of the California Association
of Winegrape Growers, a Sacramento-based advocacy organization.

"We have had aggressive planting all over the world--whether it is Chile, Australia, South Africa or New Zealand-- and reinvestment in Italy and France to update
their vineyards, so it will be difficult for everyone to realize the same profit margins," she said.

Still, tourists who flood Concha y Toro's vineyards give fervent approval. "It is a very good value," said Ed Blakely, a 57-year-old businessman from Hilton Head,
S.C., who visited Concha y Toro recently and sampled some of the best wines with his wife while on vacation. "I have become a bit of a collector like lots of people
now," he said, "so I plan to keep on buying."

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