Like its neighbor Argentina, wine production in Chile began with vine cuttings brought to South America by Spanish settlers in the 1500s. It was not until shortly after Chilean independence, when grape varieties were introduced from Bordeaux in 1851, that fine wine production in Chile began in earnest. In the late 1800s, Chile received international recognition for its Bordeaux varietal wines when phylloxera destroyed most of the vineyards in Europe. It was discovered then that Chilean wine regions, sandwiched between the Pacific Ocean, the Andes Mountains, and sandy deserts, were effectively isolated from the phylloxera epidemic.
Wine regions in Chile are mainly located in the valley between the Coastal Range to the west and the Andes to the east. The Coastal Range is not very tall and blocks a good bit of the moisture coming in off of the Pacific without blocking the cool breezes that temper the heat of the valley. The Andes Mountains send cold air down to the valleys at night which creates significant differences between daytime and nighttime temperatures. That being said, the climate of Chile is ideal for growing fully-ripe grapes with balanced acidity and structure.
Chile is still known for its Bordeaux varietal wines today, including: Cabernet Sauvignon, Merlot and Sauvignon Blanc. The varietal that is perhaps the most media and market friendly in the US is Carmenère; a very old Bordeaux grape. Chile has recently started producing other French grape varieties, such as Syrah and Pinot Noir, to great success. So, if you are looking for some great reds, look no further. Just keep in mind that like other great wine producing nations, the finest red wines from top Chilean producers will quickly leave the under $20 level and rocket up to $100 and beyond!