Challenged SA wine industry overtakes global competitors

RAY SMUTS WHAT THE wine industry will remember in particular about 2003 was the toughest export conditions in 12 years, yet they burrowed on, growing by 10%. South Africa pipped other wine exporting countries to the post with the growth rate of its market share in Britain - up by 5%. What is more, significant increases were recorded in Sweden (126%) which has replaced Germany (up 24%) as South Africa’s third largest wine destination. Growth in The Netherlands is up by 11% and wine exports to the United States and Canada increased by 33% and 20% respectively. This is however not a time for resting on one’s laurels as Su Birch, head of marketing organisation Wines of South Africa, believes more difficult times may lie ahead. Notwithstanding the current global oversupply of wine, it is anticipated that New World countries will increase production for global markets by 15% within the next two years. According to Birch, the South African wine industry will have to deal with the challenges of productivity, lower costs and better marketing in order to trade in world markets. Latest data from market researcher AC Nielsen is that South Africa stood its ground in one of the most competitive markets in the world last year, characterised by a stronger rand, smaller margins and higher export costs.