Wine industry eyes Africa export growth

SA export promotion organisation Wines of South Africa (Wosa) is set to boost its investment in the African market this year and is confident of growing market share on the continent. According to Consumer Insight Agency CEO, Craig Irving, the market is currently being cornered by French exports, particularly in countries such as Nigeria and the Democratic Republic of Congo (DRC). Matome Mbatha, Wosa market manager: Americas and Africa, told FTW that over a five-year period (2008 to 2013), South Africa’s wine exports to African countries had dramatically increased. “Export volumes to Kenya nearly tripled in those five years. In 2008, Kenya imported 1.8 million litres of wine and by 2013 that figure stood at 4.3 million litres,” he said. Nigeria imported 3.2 million litres of SA wine in 2013, compared to 2.2 million litres in 2008, he added. The fact that giant South African retailers are expanding their presence in Africa is one of the biggest opportunities for growing exports into the continent, said Mbatha. He pointed out that Shoprite Checkers – which has been active in Africa for a number of years – had reported growth of over 30% per annum from its stores north of the SA border. “Pick n Pay has 95 stores outside of South Africa and Massmart 28 in 11 countries. These retailers will play an increasingly important role in driving sales of SA wine on the continent,” said Mbatha. Tariff and non-tariff trade barriers in various African countries do however need to be removed to improve access to market. Furthermore, said Mbatha, delays at ports, customs systems that are not harmonised and the large amount of red tape in some countries, as well as the cost of doing business, often thwart effective transactions. Then there’s the issue of dual economies. “In many African markets informal sectors trade alongside formally structured markets leading to ‘grey’ products entering a market with little or no control possible from a brand’s marketing perspective.” Mbatha added that the flow of goods between the informal and formal sectors was mostly unchecked and in many instances – from a fast moving consumer goods (FMCG) perspective – actively encouraged. “We need to see more regional and bilateral trade agreements reached between governments to ensure better trade facilitation,” he said. INSERT & CAPTION Retailers will play an increasingly important role in driving sales of SA wine on the continent. – Matome Mbatha