WorldWine News

2013-01-22

South Africa's exports continue to rise - on the bulk market

South Africa's wine exports have again been on the rise during 2012. After 3.5 m hl, the year before, Cape exporters reached the bold quantity of 4.1 m hl, an increase of about 17 %. As disctinct from earlier years, Germany this time did not perform like a model student although it remains the second important market for the Africans: Instead of 0.82 m hl in 2011 imports in 2012 only reached a total of 0.78 m hl. South Africa's most important market remains Great Britain where volumes rose from 0.81 m to 0.91 m hl, slightly ahead of Germany. Whilst Sweden, the Netherlands and Denmark, traditionally strong markets for Cape wines, lost volume, Eastern Europe, the US and Canada gained strength. Yet, the positive balance sheet is again slightly overshadowed by a continuing tendency which we have already pinpointed in the past: A growing part of South Africa's export volumes is no longer shipped in bottles but as bulk wine.


The vineyards of Stellenbosch, South Africas most widely known winegrowing region. (photo: E. Supp)

This tendency, in 2012 has even gained speed. While exports of bottled wines went down by aproximately 10 % - Germany, in this perspective, showed a relatively stable performance compared to other top markets with a loss of only 4 % -, bulk exports rose by a dramatic 44 % against 2011. About 60 % of South Africa's wine export is now bottled elsewhere but not in the country of origin, a share which was expected to appear at the horizon in some years only.

As a consequence of this development, the country not only looses part of its value adding capacity but possibly also the control over the quality of what can or will be sold as South African wine around the world. In many countries it is allowed to add up to a 15 % of wine of other origins to SA wines still labelling them as South African and an estimated 20 - 30 % of bulk exports is shipped whithout any reference to its origin at all. The Australian example, the example of a country which completely ruined its export balance through this kind of bulk boom, about a decade ago, does not seem having had any discouraging effect on South Africa's winemakers.

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