Study reveals local grape economics

By Cobus Coetzee. Time of article published Jan 18, 2013

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Of every £4.50 (or R63) a British person pays for a kilogram of green seedless grapes in a UK supermarket, only R11.37 will reach the farm gates in the Hex River Valley.

Half or R5.91 of that will go to farmworkers, while the farmer has to pay for fertilisers, pesticides and other expenses with the remaining R5.46, before taking his share.

These are just some of the findings of a research report on South Africa’s horticulture industry.

Researchers found only 18 percent of the final retail price of South African grapes sold in the UK found its way back to farmers and farmworkers’ pockets.

The report was co-authored by UCT researcher Margareet Visser after 127 workers were interviewed, along with key industry players and 16 key informants last year.

Researchers found the export value of table grapes had increased by 218 percent to R3.7 billion between 2000 and 2011, that the cost of labour had also grown.

Between 2000 and 2011 the cost of labour as a percentage of gross farm income increased from 35 percent to 52 percent.

The biggest share of the final price consumers pay goes to retailers.

Altogether 42 percent or R26 of the R63 retail price goes to supermarkets in the UK.

Hex Valley Table Grape Association chairman Michael Laubscher said this week that 90 percent of all grapes produced in the valley were exported overseas.

According to the research, 49.94 percent of grapes exported make it to Europe and 20.65 percent to UK supermarkets. The remaining exports go to Asia, the Middle East and the rest of Africa.

More than 32 percent of the retail price goes to getting the grapes from De Doorns to shops in the UK and includes freight, insurance and port fees.

On average 8 percent of the retail price goes to packaging. - Cape Town

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