/ Chilean Wine as a National Beverage: A Critical Look at the Need for Legislative Reform

This year’s celebration of the National Wine Day was marked by the launch of the Wine Caucus in the National Congress, whose primary goal is to officially declare wine and pisco as national beverages. However, their legal recognition still faces structural challenges. The current tax burden and lack of incentives for small producers, among other issues, call for legislative reform that would allow Chile’s wine sector to reach its full potential.

 Laura Hernández Bethermyt
Senior Associate, Alessandri Abogados

As part of the commemoration of the tenth anniversary of National Wine Day—officially established in 2015—on September 2, 2025, a new phase began in the institutional appreciation of Chilean wine with the creation of the so-called Wine Caucus in the National Congress. This body, composed of parliamentarians and key stakeholders from the national wine sector, aims to consolidate political representation that promotes the recognition of wine as a national beverage, in light of its undeniable historical, cultural, and economic contribution to the country.

The ceremony titled “Wine: Chile’s Heritage,” led by the trade association Wines of Chile, is part of the 2025 sectoral strategy, which seeks to position Chilean wine as a premium, diverse, and sustainable product in the global market. Declaring a beverage as a national drink does not automatically entail legal changes, but it does carry strong symbolic and cultural value. This institutional and commercial momentum must be accompanied by substantive legislative reform to remove structural barriers affecting the entire industry—especially small and medium-sized producers—so that public policies, responsible consumption, production, and export efforts can be more impactful.

One of the main regulatory obstacles is the Additional Tax on Alcoholic and Non-Alcoholic Beverages (ILA), governed by Article 42 of Decree Law No. 825 on Sales and Services Tax. This tax, calculated on the same taxable base as VAT, sets a rate of 20.5% for wines intended for consumption—including sparkling, carbonated, fortified wines, chichas, and ciders—and a rate of 31.5% for liquors, piscos, whiskies, spirits, and distilled beverages, including fortified or flavored wines.

The ILA applies both to imports and domestic sales of these products, creating a regressive tax burden that disproportionately affects micro and small wine producers. This situation not only discourages competitiveness in the sector but also undermines principles of tax equity and local economic development, placing those without economies of scale or access to fiscal compensation mechanisms at a disadvantage.

Declaring wine as a national beverage must be accompanied by a critical review of the current regulatory framework and incorporate criteria of productive development, economic sustainability, and heritage protection. Modifying the ILA for certain production segments could be a measure of tax justice, aimed at strengthening the wine value chain and promoting greater inclusion of emerging producers.

Additionally, the opening of new markets—such as India, identified as a priority in the 2024 annual report by Wines of Chile—requires a commercial policy aligned with the sector’s interests. The potential signing of bilateral treaties should include specific clauses to promote Chilean wine, as well as protection mechanisms for domestic producers against unfair practices or non-tariff barriers.

Ultimately, if the goal is to position Chilean wine as a national emblem and a key player in international trade, it is imperative to move toward comprehensive legislative reform that acknowledges the sector’s particularities, eliminates tax distortions, and fosters a regulatory environment conducive to the sustainable development of the wine industry.

The article was published in El Mercurio Legal.