Chile is one of the key wine producers in this region. Like Australia, it has a small population and domestic market. However, it too has the capacity for large-scale production and is adaptive to global needs.

Reasons for success:

- Ideal climate for growing grapes
- Improving economic and political conditions. After a return to democracy in 1990, significant foreign investments have lead to production expansion and increased quality of wines.
- Low labor costs

Argentina is another South American wine producer. Unlike Chile, however, it is not part of the New World category, as it is one of the oldest winemaking cultures outside of Europe. Furthermore, economic concerns and disadvantages of scale have provided obstacles for the industry. Nonetheless, the country continues to be a player in the global wine industry.

Reasons for success:

- After adopting it’s own version of Australia’s “Strategy 2025,” they started to experience greater success. Between 2000 and 2004, they saw a 63% export increase.
- Brazil is another wine producer in South America that focuses on the production of cheaper wines. Recently (July 2005) local producers met with the Brazilian minister of commerce and requested that the government take action to motivate high-quality wine imports while taxing lower priced wines in order to make them less attractive to consumers as these wines are regarded as harmful to the sale of domestic products.

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