World says cheers to SA wines
Jun 10 2009
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International demand for South African wines has topped domestic needs for the first time, said export marketing agent Wines of South Africa (Wosa). Wosa reported a 17% growth in wine exports to about 403.3 million litres for the year to end-April 2009. Domestic consumption for the year to end-March was 308.5 million litres. 

SA is the world's ninth-biggest wine producer and accounts for 3% of global output.

Wosa CEO Su Birch said South African wines represent the fastest-growing segment in the UK wine market, occupying fifth position with 10% of the market. "SA is the fourth-biggest player in Germany and the biggest in Sweden," said Birch.

Wosa communications manager André Morgenthal attributed the export growth to competitive prices, mainly because of the favourable exchange rate. He said consumers tended to trade down. "Over the last two decades our vineyard stocks have improved," he said.

"Often South African wine is the more cost effective alternative, while there is not much of a quality compromise." However, Morgenthal said the industry still faces many hurdles. "The exchange rate is always a challenge for an exporter and can be disastrous when the rand strengthens," he said.

"Also, compared to other countries like Australia or members of the EU, our government support is not substantial enough to assist existing and emerging wine brands or farms."

Morgenthal said rising production costs, coupled with strong price competition, did not allow for producers to raise their export prices. "While marketing is important, overseas travel is expensive. You have to service your markets annually."

Birch said SA is doing well compared to other wine exporting countries. "Packaged wine exports for the first four months in 2009 were up 12%, and that is a very positive sign."

Morgenthal said South Africa has to continue to market its wines aggressively. "We have to drive Brand South Africa home before consumers will start understanding the diversity of our wine styles, regions and strengths," he said.

Source: www.fastmoving.co.za; 8 June 2009