South Africa’s wine exports records 4% growth as revenues hit US$700m

SOUTH AFRICA – South Africa posted a 4% increase in wine exports in 2018 generating US$700 million (R9.6 billion) despite declined production by wineries following the low yielding harvests due to regional drought, reports Business Day.

According to Wines of SA Chief Executive Officer, Siobhan Thompson, the increase in the value of exports arose from Wines of SA’s strategy for an increased focus on packaged and bulk wine sales.

The wine industry association CEO noted that the value of packaged wine increased by 3% and that of bulk wine by 7% adding that high quality wines have also gone a long way in driving the growth.

“We have proven that we are indeed producers of world-class, high-quality wines and deserve to have this reflected in our bottom line,” said Siobhan Thompson.

China, being a major export market of SA’s wines, recorded an impressive growth of packaged wine by 7% while the US market remained constant.

However, Wines of SA noted that, the US market has always been stronger in terms of their procurement of more premium-priced wine.

According to Wines of SA, the European markets noted a significant value increase on all fronts as an improvement from the minimal growth recorded in the past few years.

Kenya, Tanzania ad Zambia were the major markets in the African countries showing strong growth as values of total exports grew by 73%, 35% and 33% respectively.

Wine is one of SA’s largest agricultural exports, with nearly 100,000ha of vineyards, mostly in the Western Cape, accounting for 4% of world production.

Despite encountering strong headwinds in the recent years, the industry has noted significant performance contributing US$2.64 billion to the country’s GDP and employs nearly 290,000 people.

According to Vinpro, a wine producer body in SA, the number of producers have declined by 25% in the past 10 years as cost of production increases.

The Bureau for Economic Research and the Bureau for Food and Agricultural Policy predict that at 85,000ha, the area under wine grapes will be about 10% smaller by 2022.

Anura Vineyards, Bouchard Finlayson, Steenberg Wine Estate, Elgin Vintners, Hamilton Russell Vineyards, Distell and Anura Vineyards are among the major wineries in the country.

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