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Brazzil - Economy - July 2004

Brazil Wants the World Drinking Cachaça

At present, Brazil produces 1.3 billion liters of cachaça annually.
But only 1 percent of that is exported. Cachaça, a sugarcane-
based aqua vitae, is Brazil's most popular distilled alcoholic
beverage. One of the problems with cachaça production
is that 90 percent of it is produced on a mom-and-pop scale.

Fabiana Uchinaka


Picture The idea is to turn Brazil's most popular distilled alcoholic beverage, a sugarcane-based aqua vitae known as cachaça, into a premium drink on world markets. The process is underway at the Brazil Cachaça 2004 fair in São Paulo which opened yesterday.

This is the second annual cachaça fair sponsored by the Apex (Agência de Promoção de Exportações—Export Promotion Agency), which is housed in the Ministry of Development, Industry and Foreign Trade, and the Association of Cachaça Producers.

This year Apex has brought in buyers from the United States, Portugal, South Africa, Argentina and Russia. It is hoped that the fair will generate US$ 4 million (12 million reais) in new business.

They will join already faithful aficionados of Brazilian cachaça from Germany (which is the most faithful foreign buyer; they sipped up 30 percent of all cachaça exports last year), France, Italy, Spain and England.

At the moment, Brazil produces 1.3 billion liters of cachaça annually. But only 1 percent of that is exported. One problem is that much of the production is on a very small scale, practically homemade manufacture.

In fact, 90 percent of cachaça production is on a mom-and-pop scale run by people who are unable to get on international markets. So Apex has been working with the Sebrae (Serviço Brasileiro de Apoio às Micro e Pequenas Empresas—Small Business Administration) to unite and organize them so they can start exporting.

That effort has begun to bear fruit. In 2002, a total of 107 cachaça businesses exported US$ 10 million. This year the target is for cachaça exports to reach around US$ 15 million. Apex says it intends to reach that target by bringing another 146 cachaça manufacturers into the export sector by the end of this year.

The biggest challenge the cachaça export sector faces on international markets is not tariffs, but the question of quality. That will require time and training, says Murilo Albernaz, who heads Fenaca (Federação Nacional das Associações dos Produtores de Cachaça de Alambique—National Association of Alembic Cachaça Producers Association), a cachaça manufacturer association.

"It may take five or six years to reach top international quality standards, but we have great potential. By next year, our exports will begin to jump," he says. The organizers of the fair are meeting with producers, explaining the requirements of importers and the ropes of export markets.

The fair ends on Sunday, July 25. A total of 25,000 visitors are expected to attend.

The Brazilian Drink

Last year, Brazil took a decisive step towards registering the name "cachaça" as a national trademark. A decree published on October 3, 2003, presented all the specifications of the beverage and defined the "caipirinha" (similar to a daiquiri, but with cachaça, Brazilian sugarcane spirits, instead of rum). An earlier decree was not clear on these points, and Brazil ended up exporting cachaça as rum or "other distilled beverages."

According to Ricardo da Cunha Cavalcanti Júnior, coordinator of plant inspection in the Ministry of Agriculture, the Brazilian decision was communicated to the World Customs Organization (WCO) to the World Trade Organization (WTO).

He also informed that Brazil produces 1.3 billion liters of cachaça per year, and less than 2 percent are exported, chiefly to Germany, France, Portugal, Japan, and the United States.

For Cavalcanti Júnior, Brazil does not desire to stimulate the use of alcoholic beverages, "but to occupy a market niche for an eminently national product."

Cachaça is a genuinely Brazilian drink which has become the third most consumed worldwide (behind vodka and soju).

Pratini de Moraes, Minister of Agriculture of the Fernando Henrique Cardoso's administration, had already ordered standards to be set for the registration of cachaça producers so as to make them more competitive domestically and on international markets.

Fabiana Uchinaka works for Agência Brasil (AB), the official press agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br.
Translated from the Portuguese by Allen Bennett.

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