Drought slaps South African wine industry hard

SOUTH AFRICA – The country’s top winemakers have warned that the impact of the nationwide drought could affect the quality of the crop.

SOUTH AFRICA – The country’s top winemakers have warned that the impact of the nationwide drought could affect the quality of the crop.

Wines of South Africa (Wosa) on Thursday said two years of drought, which has continued unabated in the Western Cape, was beginning to impact on the production of wine in the country.

“While the two years of drought in the Winelands has impacted on wine production volumes, it has not necessarily impacted on quality.

Despite the lower yields, we have still seen excellent quality wine being produced,” Wosa chief executive Siobhan Thompson said.

The South African wine industry is a significant foreign-exchange earner for the local economy, thanks to strong exports to large parts of Europe and North America, contributing R36.1 billion ($2.75b) to the national GDP last year and providing employment to more than 300 000 people.

According to recent statistics from the South African Wine Industry Information Systems, there are 98 597 hectares of vines producing wine grapes under cultivation in South Africa, an area covering about 800km.

The agency said there had also been a positive shift in terms of exports in value, with packaged exports to Canada growing 25 percent while established markets like Germany and the Netherlands both grew by more than 20 percent year-on-year from 2015 to 2016.

It said bulk exports to China in terms of value had more than doubled, while packaged exports grew by more than 10 percent in value.

VinPro, the industry body representing wine producers, said raging fires in the Winelands had resulted in dozens of hectares destroyed, reducing total plantings by 1 percent.

But Thompson said that, despite the challenges, the industry had invented new strategies to deal with the drought, including driving higher-value returns and getting the produce into the market.

“We are continuing to drive getting higher value for our wines in established markets such as Europe and, at the same time, focus on building share in newer markets with future potential for South African wine, in North America, Asia and Africa.”

She said the recent increase in the quota of wine exported to EU markets would assist the country to remain competitive in what is traditionally a very tough market.

“We hope that the reduction in tariffs on a larger volume of exports would be strategically used to either build brand or help improve profit margins for the wine producers.”

February 10, 2017; http://www.iol.co.za/business-report/companies/wine-makers-hit-by-drought-7692953

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