São Paulo - 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 Export Promotion Agency (Apex) 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 (R$12 million) 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% 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% of that is exported. One problem is that much of the production is on a very small scale, practically homemade manufacture. In fact, 90% 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 Small Business Administration (Sebrae) 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 a cachaça manufacturer association (Fenaca). "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.

Agência Brasil
Reporter: Fabiana Uchinaka
Translator: Allen Bennett
07/23/2004