South African wine reaches tipping point

16 September, 2015

The South African wine industry has reached a "tipping point", according to Michael Jordan, chairman of Wines of South Africa, speaking at Cape 2015. 

He said 21 years after the Apartheid, the wine industry has been "liberated" to travel the wine world and there has been an explosion of "new techniques and varieties".

From 200 wineries producing 22m litres in 1992, there were 600 wineries making 422.7m litres in 2014.

Western Cape minister for economic opportunities, Alan Winde, told the audience at the Cape Town conference that the wine industry and tourism had become "key components" of the South African economy.  

He said 50% of SA wine was exported and there has been an 80-90% growth in exports to China. He also stressed the opportunity within Africa itself. He spoke of "removing red tape” and creating an “enabling environment".  He concluded by calling on the wine industry to double its 422m litre output.

In opening, Wosa CEO, Siobhan Thompson, described South African wine as having a "nervy energy and being full of contradictions". Nevertheless it was "resourceful, adaptable and inventive".

"We have made major strides and after 21 years of democracy, we are now in a state of adulthood," said Thompson.

Analjit Singh, chairman of Max India and owner of vineyards in Franschhoek, called on the South African government to make the economic landscape "more attractive to investors".

Referring to the government's new immigration rules - which have called for minors to carry “unabridged birth certificates”, subsequently badly affecting tourism - he called on the government to be "more relaxed", to "open up the country" and "bring in best in class".

According to Statistics South Africa, foreign tourists for April were down 11% against a year earlier and Chinese tourists were down 45% compared to 2013. The country's tourism industry, of which the Cape winelands is an important component, is estimated to have lost 886m rand (US$82m).

Hennie Heymans, managing director of Cape 2015’s lead sponsor DHL SA, told the audience that "Africa is rising" but it faces the following challenges: under-developed infrastructure; customs inconsistencies; a lack of connectivity, not just electronically but, for example, fuel for aircraft waiting on the tarmac; political instability; and war, crime and corruption.

He said in Europe logistics accounted for between 3 and 7% of overall costs. In Africa it could be +42%. Heymans estimated that millions are lost in potential earnings due to restrictions, regulations and import costs. Nevertheless, he said Africa was a huge untapped markets and there were still "massive opportunities in sub-Saharan Africa".

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