(Wine-Searcher) - Wine industry workers take to the streets as Argentina's economic crisis threatens this year's harvest.

The city of Mendoza in Argentina ground to a halt today as more than 5000 grapegrowers, winemakers and vineyard workers protested against government inertia over a bailout for the troubled wine industry.

According to media reports, the protesters chanted slogans and dumped wine on the steps of city hall as they demanded that local and national politicians move on promises of financial aid made earlier in the week, so the harvest – which is due to begin in a matter of weeks – could take place.

The Argentinian wine industry is facing its biggest challenge in decades, as falling exports, rising inflation, tightened credit and a poor exchange rate combine to endanger the livelihood of many in the industry, especially those at the cheaper end of the market.

Argentina made its overseas reputation with good wines at low prices, a segment of the market that is increasingly difficult for its industry to service, as the country's wider economic crisis sparks steep cost increases for essentials such as vineyard treatments, oak barrels, and bottles.

The wine industry in Argentina represents 1.3 percent of overall GDP and the 1300 wineries provide direct and indirect employment for more than 400,000 people. In 2013, exports fell for the first time in a decade, from a 2012 high of $918 million to $866m. The figures for 2014 are estimated to be even lower, at $823m.

Grape prices – which have been historically set by the buyer rather than the seller in Argentina – have not kept pace with inflation, leading to situations where a liter of basic wine sells for 1.80 pesos, but costs 4.08 pesos to produce. Basic red wine sells for 2.64 pesos a liter and costs 4.50 pesos to produce. (One peso equals $0.12.) Overall, grape prices have risen 10-15 percent over the past four years while costs have increased by 80 percent.

In Mendoza, the demonstration united the industry in the face of what protesters saw as an uncaring provincial government. Earlier this week, national president Cristina Fernandez de Kirchner signed an agreement with the wine industry committing to a $56m relief fund, much of which would be used to mop up some of the 300m excess liters of wine currently sloshing around the market.

Susana Balbo, president of the Wines of Argentina export marketing body, said there were few companies with the scale to export lower-priced wines.

"In the domestic market we are tight, too, because of the cost increases due to inflation and the consumers will not accept the sort of price rises we need to make."

Protesters in Mendoza did not get to meet provincial governor Francisco Pérez, and ended up splashing wine around the entrance to Government House and leaving a petition demanding action. Pérez, by contrast, decided to remain in the building and communicate with "the people" via a series of Twitter messages, none of which would have reached the protesters.

Demonstrators also wanted to cancel the annual harvest festival, which the provincial government spends hefty money on, arguing that without aid there would be no harvest.