Latest news with #SouthAfricaWine
Daily Maverick
26-05-2025
- Business
- Daily Maverick
South Africa's resilient wine industry learns to adapt and survive in tougher environment
Wine producers and affiliated businesses are using new strategies to stay relevant and thrive. South Africa's wine industry is a national asset that stretches far beyond the picturesque Winelands, says Rico Basson, chief executive of South Africa Wine, an umbrella body for the sector. The industry's leaders know that its survival lies in reimagining every step of the value chain, from how wine is packaged, to where and how it is sold and consumed. 'It's a sector that employs 270,000 people,' Basson says. 'Wine goes back to farming from Agulhas in the south to Upington in the north.' It's an industry that's staring down the reality of shrinking production, younger generations that are drinking less and beer still ruling South Africans' booze budget. Trends and innovation South Africa's wine producers are throwing out the old playbook. Lighter bottles, lower-alcohol-content wines and even cans are becoming tools in the fight for relevance, affordability and sustainability. 'Alternative packaging like cans is becoming a huge trend,' Basson says. 'It's not about the volume; it's about meeting consumer needs and accessing new channels.' The planet is also part of the equation. A typical wine bottle weighs 450g when empty. Exporters are moving to 360g bottles, says Basson, cutting both costs and carbon. South Africa can't beat the French on climate, but Basson believes the country has a competitive edge in the ways it is able to adapt. 'In France you can't produce Cabernet and Pinotage side by side. In Stellenbosch you can.' Behind every sip of wine lies one of the country's most complex value chains. According to Basson, it maps no fewer than 127 career pathways. 'We've got 86,000ha of vineyards, 2,000 growers and 80,000 workers just on the primary side,' he says. 'For every one job you create on a farm, the chain creates 10 others.' Victor dos Reis, head of Investec Private Capital, reckons the sector has much to offer investors. 'We've got fantastic resources, fantastic people and fantastic technology. So to me it makes good sense for an investor to look here.' Dos Reis says there are several value-adding opportunities in processing and canning, and in the tech-driven solutions emerging from the Western Cape's growing digital economy. Infographic by Kara le Roux Expansion and challenges The subsector of wine tourism is also growing at an exponential rate. The biggest misconception is that all wine tourists are foreigners, says Basson, who notes that about 66% of them are South Africans. The challenge is to spread the tourist wallet to more destinations and experiences. 'We can't take more people up Table Mountain, but we can take more people to Darling,' he says. Dos Reis says the industry must keep innovating the wine tourism experience. 'Wine tourism has quite a few factors. There are countless opportunities. You've just got to be creative around it.' The alcohol industry is also navigating a regulatory and operational environment that is becoming increasingly strict. 'Our biggest threat right now is [excessive] taxation,' Basson says. 'We don't have a problem with regulation; we have a problem with enforcement.' According to National Treasury figures, 14% to 22% of all alcohol trade in South Africa is illicit, adding nothing to the country's coffers. 'If you're Treasury and you can enforce [taxation], you can get back a lot of your excise,' Basson says. At the same time, the industry is wrestling with sustainability expectations. There is much chatter about environmental, social and corporate governance issues, but Basson cautions against it being 'window dressing'. The sector is working on formal baseline standards to set tangible goals and move to greener systems, he adds. DM This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
Daily Maverick
06-05-2025
- Business
- Daily Maverick
Last call for reduced tariff trade: South Africa Wine races against US deadline
As the cork tightens on South Africa's wine exports to the United States, the industry now has clearer, if sobering, guidance on how looming tariffs will take effect once Trump's 90-day grace period ends this July. South African wine exporters now have a hard deadline, and little room to manoeuvre, after US Customs and Border Protection confirmed how US President Donald Trump's reciprocal tariff order will apply once the 90-day reprieve evaporates on 9 July 2025. This is according to a Monday, 5 May update to its members by South Africa Wine, the industry's umbrella body. 'According to our interpretation, goods shipped and in transit before 6.01am South African Standard Time on 9 July 2025 will face only a 10% tariff, while those arriving later will be hit with the full 30% surcharge,' said Christo Conradie, stakeholder engagement, market access and policy manager at South Africa Wines. This tariff gauntlet flows from Trump's 2 April executive order, which shook up existing trade preferences under the African Growth and Opportunity Act (Agoa). While Agoa technically remains in force until 30 September 2025, it has now been partially neutered, overruled by the more aggressive reciprocal tariff framework. US Customs also confirmed this to South Africa Wine. Political uncorking Behind the scenes, Conradie said that South Africa Wine is working with the Agricultural Business Chamber and key government departments. 'South Africa Wine continues to engage with US and local stakeholders to confirm this officially and to continue seeking a longer-term solution,' he said. South Africa Wine remains in weekly contact with the Department of Trade, Industry and Competition, the Department of Agriculture, Land Reform and Rural Development, the Department of International Relations and Cooperation, and representative bodies Business Unity South Africa and the National Economic Development and Labour Council to negotiate a solution. After Trump's tariff order on 4 April 2025, the South African News Government Agency released a statement after Minister of International Relations and Cooperation, Ronald Lamola, spoke during a media briefing on the subject. Lamola said that plans were afoot to navigate the challenges imposed by the tariffs include securing better trade terms with the US, using the African Continental Free Trade Area (AfCFTA) to strengthen regional trade access across Africa, and focusing on high-value manufacturing to minimise vulnerability to tariffs. Of particular note in South Africa Wine's communication to stakeholders is the statement that a phone call between President Cyril Ramaphosa and Trump last week initiated 'direct diplomatic engagement', and looks to be encouraging. Now that the fog has lifted The dust may have settled on logistics but the race is on to move stock before the deadline, while backroom diplomacy shifts into overdrive. South Africa Wine has promised to keep stakeholders informed of any developments, as per its communiqué on 5 May. DM
