South African wine: Pay more or the industry gets it

Drinks: Drinks, Wines

Wineries in South Africa need to be able to charge more for their wines or the entire industry’s future could be under threat.

That was the stark warning from Wines of South Africa’s chairperson, Carina Gous.

Speaking at the opening of Cape Wine 2018, Gous painted a picture of an industry battling problems on many fronts, from Brexit-inspired uncertainty in key markets like the UK to climate change and possible land reform.

Carina Gous, Wines of South Africa chairperson

The country has spent the last few years battling its worst drought in over 100 years.

But the biggest threat of all was an inability to charge a sustainable amount for its wines.

‘Profitability remains a huge challenge for us,’ said Gous. ‘We’ve seen almost a quarter of our primary grape producers leaving the industry in the last ten years to farm more profitable crops. It’s led to a big decline in our area under vineyard.’

Despite being a relatively small producing country, South Africa has one of the lowest prices per litre of wine, largely due to the dominance of shipping in bulk.

‘We haven’t developed our packaged exports, but for a country that’s trying to increase employment that’s crucial for us. It’s the single biggest challenge we face as an industry,’ said Gous.

This bleak analysis was backed up by wineries that Imbibe spoke to in the Cape, with one source estimating that over 25% of them currently lose money.

Bottled wines, and higher-value channels are seen as crucial to the ongoing survival of the South African wine industry, which means that the UK’s sommeliers could be on the end of a sustained charm offensive in the coming months.

‘Unless we get [price]right we cannot look after our communities and sustain what we have in the wine industry,’ concluded Gous. ‘We will not have a sustainable industry.’

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