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Strong Peso Hampers Concha y Toro Even As Sales Rise Sharply

May 12, 2011

Chilean winemaker Concha y Toro experienced impressive sales growth in the first quarter ended March 31, but a strong Chilean peso hurt profits. While Concha y Toro’s first quarter sales advanced by 17.5% to P79.61 billion ($170.5m), net profit slipped 0.7% to P6.48 billion ($13.9m).

With the peso growing stronger against key currencies like the U.S. dollar and U.K. pound sterling, Concha y Toro’s exports have been at a disadvantage. However, the unfavorable exchange rate has led the winemaker to raise prices and focus more on high-end wines, as reflected by the company’s 3.4% increase in average case price in dollar terms during the first quarter.

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