SA Wine faces International Challenges in 2012

December is here and now 2012 is really rushing to its end.  I am interested in how the SA Wine Industry has performed this year and this week my focus is on how we we have been facing challenges in the international market.

In Business Day Live, renowned South African Wine Writer, Michael Fridjhon wrote an article Cape wine industry has proven its mettle in tough times:  “The Cape wine industry must be among the most dynamic in the world: despite one of the longest and most emasculating recessions in almost a century, it has proved resilient, creative, even optimistic.”

I can’t help but agree. There is no denying the challenges the South African Wine Industry has been faced with the past few years, but it is interesting to look at how we reacted to these.

SAWIS figures show that while bottled wine exports have declined in 2012 (-7.65%), bulk wine exports increased (47.1%) and the overall performance has increased with 18.33% (Follow the link below to see the SAWIS comparison for export figures for December 2010 – November 2011 with December 2011 – November 2012).

Download Sawis stats

While the industry stays worried about pricing and profit margins, it is facing up to its challenges. The increase in bulk export figures is due to the industry shipping wine more cost effectively in bulk and bottling overseas in order to be more competitive in the market place. And while traditional markets are becoming less and less viable for South Africa due to the European economic crisis, the increase in Old World wine exports and also high excise duty and VAT in SA’s traditional focus market, the UK, we are shifting our focus to other markets.