South Africa Wine advocates for government action to address industry challenges 

SOUTH AFRICA – South Africa Wine (SAW), a non-profit advocacy organization, has called on the government to prioritize key issues affecting the wine industry ahead of the State of the Nation Address (SONA).  

The organization has submitted various concerns to government departments, emphasizing the need for urgent attention to safeguard the industry’s well-being. 

Among the highlighted issues, SAW urged increased investment in law enforcement to combat the growing threat of illicit trade, emphasizing the importance of curbing illegal activities.  

Additionally, the organization emphasized the need for enhanced investment in ports and railways to support economic growth, pointing out their crucial role in the wine industry’s supply chain. 

Highlighting environmental concerns, the organization urged the government to focus on establishing a transition to alternative power sources and safeguarding water resources.  

Rico Basson, CEO SAW said, “We strongly urge government to ensure excise taxes remain aligned with inflation rates and linked to the incidence alcohol policy framework set by the National Treasury, thus avoiding undue burden on our industry and producers.  

The wine and brandy sector needs a balanced approach to taxation to ensure economic stability and foster fairness in the system.” 

While the wine and brandy industry contributes significantly to South Africa’s GDP, with US$2.96 billion and 270,000 jobs, the organization expressed concerns about the lack of profitability at production and winery levels. It called for targeted interventions and policy adjustments to address this issue promptly. 

Basson added, “South Africa Wine would like to urge Government to prioritise these important issues in the upcoming SONA. We firmly believe decisive action in these areas will pave the way for a more resilient, sustainable, and prosperous future for the South African Wine industry and those who work and live here.” 

Meanwhile, a macroeconomic impact report by FTI Consulting on the impact of wine and brandy on the economy shows it’s being shackled by logistical issues at ports, policy uncertainty, a lack of action against the illicit alcohol trade, and disruptions due to geopolitical issues. 

According to the report, SA has lost more than 10 percent of its total area under vines since 2013, due to prolonged drought conditions, sharply rising cost pressures and reduced profitability. 

The report indicated that wine production costs surged 15.3 percent in 2022, more than double the 7.3 percent compound annual rate from 2013 to 2022. In 2021, wine exports surged by 22 percent to 388 million litres, due to eased lockdowns, lower prices and larger crops, but a year later, they dipped by 5 percent to 369 million litres. 

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