Get more Mail & Guardian
Subscribe or Login

SA wine sector sees World Cup boost

South Africa’s wine industry expects increased global sales in 2010, although a strong and volatile rand currency threatens its long-term prospects, a senior official said on Wednesday.

The sector expects the Soccer World Cup — which kicks off in South Africa on June 11 — to boost sales hurt by a global economic crisis and weakened economies in key export markets across Europe and in the United States, said Su Birch, chief executive officer of Wines of South Africa (Wosa).

Wosa represents all of South Africa’s major wine exporters, including Distell and KWV.

South Africa wine producers and exporters were using the world’s most watched sports spectacle to increase marketing, and Wosa plans special braai (barbeque) festivals in key export nations competing in the tournament, she told Reuters in an interview.

Leading supermarket retailers in Europe, such as Sainsbury and Tesco, were also eager to promote South African wines.

“There is huge interest and excitement around 2010 … there isn’t a supermarket group in Europe that doesn’t want to do a South African promotion,” Birch said.

An estimated 450 000 foreign tourists expected to attend the World Cup would be able to pick up quality wines usually seen on European shelves for about R30.

Exports for South Africa’s packaged wines were expected to increase by between 10% to 15% in 2010, Birch said, adding: “The interest around South Africa and South African wines as a result of 2010 is just phenomenal.”

But the strength of the rand — which gained about 30% against the dollar on improved risk appetite in 2009, making it one of best performing emerging currencies — was a concern for the industry.

Stronger rand hits exports
Analysts say the stronger rand has hit exporters hard as Africa’s strongest economy tries to recover after exiting its first recession in 17 years in the third quarter of last year.

“The currency is a huge worry and we fear that if it doesn’t move it will, long term, be the death knell of the industry,” Birch said. “It is crippling because nobody can make any [profit] margins and what is worse is the huge volatility.”

Key export destinations include Britain, The Netherlands, Germany, Scandinavia, Canada and America, with focus also turning to emerging economies Russia and China.

Birch said the industry, which employs about 250 000 and last year celebrated its 350th anniversary, was struggling despite exports surging by 335% between 1995 and 2007.

“The industry is really in financial trouble. There is no new [vine] planting going on, so we are not going to sustain growth,” she said. – Reuters

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Wendell Roelf
Wendell Roelf has over 48 followers on Twitter.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

Local elections: Water tops the agenda in Limpopo’s dry villages

People in the Fetakgomo Tubatse local municipality, who have to collect water from Motse River, are backing independent candidates because they’re tired of parties’ election promises

Careers the Zondo state capture inquiry has ended (or not)

From Vincent Smith to Gwede Mantashe, those named and shamed have met with differing fates

More top stories

Nigeria’s palm wine tappers face stiff competition

Large companies such as International Breweries and Nigerian Breweries are vying for the population’s drinking money

Covid-19 border closures hit Zimbabwe’s women traders hard

The past 18 months have been tough for women cross-border traders, who saw their income vanish when borders closed

Local elections: Water tops the agenda in Limpopo’s dry villages

People in the Fetakgomo Tubatse local municipality, who have to collect water from Motse River, are backing independent candidates because they’re tired of parties’ election promises

A bigger slice of the pie: Retailers find ways to...

The South African informal economy market is much sought-after, with the big, formal-sector supermarkets all looking to grow their share
Advertising

press releases

Loading latest Press Releases…
×