South African wine export booming

Khanyi Magubane

The world is drinking South African wine, and lots of it. Recent figures indicate that in 2007 wine exports increased by 16% on the previous year. Su Birch, CEO of Wines of South Africa, says the demand for South African wine is now spilling over to more countries. “Whereas five years ago, 72% of our packaged exports went to just the UK and the Netherlands, the net has widened so that the UK, Sweden, the Netherlands, Germany and the US currently account for 70% of total export volumes,” she says.

With the exception of the Netherlands, where sales are characterised by heavy discounting, all other major markets have shown sound growth in demand for local packaged wines, Birch says.

“In the Netherlands, we are currently addressing the higher-priced segment of the market, where margins are more attractive for producers, and we are advising local wineries to move their focus away from extreme value business.” When the final figures for 2007 come in, it’s expected that the amount of wine sold will exceed the 300-million-litre mark – a record for the country. Birch projects an increase in export volumes of at least 6%.

“Although a conservative estimate, all indications are that the temporary setback in sales experienced in 2006, when volumes dropped some 5% on 2005, is now well and truly behind us,” she says.All wines for export must be granted an export licence. Samples of each batch of wine destined for foreign countries are sent to the Wine and Spirit Board at Nietvoorbij, Stellenbosch, where they undergo detailed tasting tests and chemical analysis in the laboratories before licences are granted. An official seal is given to each bottle by the Wine and Spirit Board, which verifies that the claims made on the label regarding origin, vintage and grape variety are true.

South African wine at a glance

South Africa’s winemaking tradition dates back some 350 years, when the first settlers arrived at the Cape from Europe. The earliest documented history of winemaking dates back to 1655, when commander Jan van Riebeeck of the Dutch East India Company planted the first vines. In 1659, Van Riebeeck wrote his famous report: “Today, praise the Lord, wine was pressed from Cape grapes for the first time.”

After Van Riebeeck, Governor Simon van der Stel firmly established the wine industry in the Cape. He founded the town of Stellenbosch, which remains South Africa’s wine mecca. But by the end of the 19th century, local vineyards and production were in decline. As in Europe, phylloxera (a small but deadly grapevine pest) had taken its toll. To control production and the market, a large farmers’ cooperative, the KWV,was established in 1918. This became a powerhouse, which saw the industry through the slump.

After 1994, the South African wine market experienced phenomenal growth. According to the latest statistics released by Wines of South Africa, the 2007 harvest is estimated at 736.9 million litres of wine, which is 27.2 million litres up from the 2006 figure of 709.7 million litres.

South Africa currently produces 3.4% of the world’s wine and ranks as number nine in overall volume production. Although still considered a young market, the South African wine industry is one characterised by quality more than just the quantity of wine exported.

Useful links