Sales at South Africa’s 30th annual Nederburg Auction on April 2 and 3, arguably the highlight of the wine industry’s calendar, saw wine sales fall by 11,2% to R6,73-million from the record R7,58-million achieved in 2003, the first time a decline has been recorded since 1993.
The lower rand value of sales was due both to fewer cases being sold at the auction and a 9,1% fall in the average price per case — to R1,118 from R1,230 in 2003. This was partly a reflection of the difficult conditions in both the local and international wine industries and the strong exchange rate of the rand, which made international buyers less enthusiastic than previous years and has put a damper on South Africa’s tourism industry.
The international market is experiencing an oversupply of wine, particularly from “Old World” producers such as France and Italy, driving prices lower and sparking fierce competition among all wine producing countries.
Approximately 7 977 nine-liter cases of wine were sold at the auction, 581 less than in 2003. At the same time, 61 lots totaling about 1 300 cases remained unsold, not having achieved their reserve prices.
Auction manager Bennie Howard said many of the unsold lots were white varieties such as Chenin Blanc, Semillon and Gewurztraminer, which are less popular these days. Some lots also came up for bidding late in the Friday session, a time when it was very hot and bidders were tired from the day-long activities.
“The result reflects what is happing in the industry, with lots of wine sitting out there,” he noted. “Also restaurants are saying the local tourism is not as buoyant now as in the past five years due to the strong rand.
“The correction is prices is not unexpected, given the very high prices achieved, particularly for reds, in 2003,” Howard added. “This can be good for the industry as price guidance for the future.”
He added that the Nederburg organisers would look for solutions to avoid the late-afternoon bidding lull.
Prices achieved for red wines were hit the most, falling by 15,1% to an average of R1,208 per nine-liter case from R1,423 in 2003. The average price of dry white wine declined by 9,4% to R645 per case from R712 a year earlier, while prices for semi-sweet, noble late harvest, sparkling and fortified wines rose.
The two-day event was attended by 1 700 buyers and guests from 33 foreign countries. Local buyers accounted for 87,4% of total sales and foreign buyers only 12,6%, although some local purchases will still be exported.
As in past years, South African supermarket retailers and wholesalers continued their dominance of the top 10 buyers, accounting for 33% of total sales. The top buyers were listed retailer Pick ‘n Pay, Checkers (part of the Shoprite group), Makro (part of the Massmart group), Cape Town Fish Market and the Butcher Shop & Grill, followed by Metro Cash & Carry and Spar Western Cape.
There were two international buyers in the top 10 — Hotel Palmquell in Namibia and wine importer Vina Vita from Russia.
Pick ‘n Pay accounted for 10,8% of total sales, followed by Checkers and Makro at 7,9% and 7.2% respectively, and the Cape Town Fish Market at 5,3%, while the Park Hyatt Hotel bought 2,3%.
“After 30 years prices at the auction have increased dramatically,” noted Howard. “The average price in 1975 was R1,50 per bottle, compared with more than R100 per bottle today, confirming the top quality of South African wines.”
Overall, the highest price paid was R12 000 for the Monis Collectors Port Stamp Collection 1948 (6 x 750 ml).
Top prices for red wines were R6 200 for a Lanzerac Pinotage 1964 (6 x 750 ml); for dry white R1 600 for the Hamilton Russell Chardonnay 2001 (6 x 750 ml); and for noble late harvest R1 800 rand for six 500ml bottles of De Wetshof Edeloes 1998.
The highest price paid for an MCC sparkling wine was R530 for one three-litre bottle of JC le Roux Pinot Noir 1990. The highest price paid for a fortified wine was R410 for the Nuy White Muscadel Full Sweet 1997 (6 x 750 ml).
Doyenne of the French wine industry Madame May de Lencquesaing from Château Pichon Longueville in Bordeaux was the guest speaker.
“You have taken incredible steps in these past 30 years,” she said. “This anniversary is the occasion to promote your wines of the highest quality. They are the flagships of South Africa.
“You must go ahead with enthusiasm, energy and excitement, always ready to improve your knowledge. If you work on quality and communication, you can be the leaders.”
Veteran auctioneer Patrick Grubb set a new world record for presiding over the annual wine auction for 30 years, knocking down more than 245 000 cases of wine to the value of more than R80-million since its inception.
Another highlight was the symbolic handover of the key to the doors of the new Heritage Centre to Günter Brözel, who was cellarmaster at Nederburg for 33 years. The centre has been named after him as a tribute to his legendary career.
The charity sale raised R245 000 in total, with the highest price being paid for a 300-litre barrel of Nederburg Shiraz 2004 that was bought by Whitey Basson, CEO of the Shoprite group. The highest price paid for a case of the special charity wine Nederburg Amateur was R3 500.
The charity beneficiaries were the Hospice Palliative Care Association of South Africa and the Mothers to Mothers Aids support group. — I-Net Bridge