WorldWine News

2012-01-26

Bulk: South Africa in the footsteps of Australia?

South Africa's wine exports, under pressure for the second year in a row already, could face dramatical structural changes in the near future, if you believe the statistics and previsions of the wine industry's information body SAWIS (South African Wine Industry Information & Systems) which were recently published. Already, the decline of total exports from 3.78 m hl in 2010 to only 3.68 m in 2011 was completely at the cost of bottled shipments which receded from 2.22 to only 1.78 m hl, whilst bulk shipments increased from 1.48 to 1.82 m hl. This trend will even grow stronger in the next five years, and by 2016 only slightly recovered bottle shipments (1.86 m hl) will face an enormously grown bulk shipment share of 4.4 m hl. This would completely turn around the favourable bottle-bulk rate of the last decade and South Africa would thus have exported not only wine but also a good part of its value creation. If, during the same period, the Rand should further strengthen its position in relation to US $ or EUR, South Africa could find its position on the markets seriously threatened and become a low-cost bulk supplier only - just like Australia did in the past decade. The domestic market, slightly growing from 3.04 to 3.58 m hl till 2016, would not be able to compensate the relative value loss of value.

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