Wine industry records 5% decline

RAY SMUTS THE YEAR 2006 ended on a disappointing note for the South African wine industry, export volumes dropping unexpectedly for the first time in 12 years. A decrease of 5% is expected in 2006 as a whole, following impressive growth of 1 100% in volumes between 1992 and 1995 – from 22 million to 282 million litres. The export drop in the eleven months to November was 14.8 million litres to 245.8 million litres, compared with 260.6 million litres in 2005. The decrease pertains particularly to the country’s longest-standing destinations, the United Kingdom and the Netherlands, where volumes were down 17% and 22% year-on-year respectively. South Africa’s UK market share is also down from 10% to 9%, to the benefit of Australia and California. Even the United States, where South Africa has high hopes for growth, proved a bit of a let-down with a decrease of 2%. Su Birch, CEO of Wines of South Africa (Wosa), says the decrease came unexpectedly – double-digit growth had been anticipated. She says the industry has been badly affected in the UK by major change in brand ownerships and distributorships.