South African wine exports jumped 7.7 percent in value to R9.1 billion in 2020 compared to a year earlier despite the five week ban on exports. Picture: Ben Stansall
South African wine exports jumped 7.7 percent in value to R9.1 billion in 2020 compared to a year earlier despite the five week ban on exports. Picture: Ben Stansall

Wine exports improve on favourable weather despite Covid-19 threat to vineyard production

By Dineo Faku Time of article published Jan 21, 2021

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JOHANNESBURG - SOUTH African wine exports jumped 7.7 percent in value to R9.1 billion in 2020 compared to a year earlier despite the five week ban on exports.

Wines of South Africa (WoSA) said in a report yesterday that total export reached 319.2 million litres in 2020, despite the ban and huge challenges at the Cape Town Port terminal due to Covid-19.

WoSa said the increase come on the back of good weather conditions with vineyards have bouncing back from the crippling drought. The group said the value of packaged wine exports recorded an 8.3 percent increase to R7.2bn on higher sales.

“This follows on from a good 2020 harvest and vineyard recovery of the drought experienced in the South African winegrowing regions from 2015 to 2018,” WoSA said.

The group said the UK remained the biggest market for South African wine exports in 2020 with a 23 percent leap to R2.1bn and Germany up 4 percent to R1.28bn.

It said exports into the The Netherlands surged 17 percent to R891 million, 20 percent to the US at R637m and 12 percent to Sweden at R553m.

The report said the value of bulk wine exports increased 5 percent to R1.9bn and volume increased 3.7 percent to 181 million litres.

WoSA chief executive Siobhan Thompson said the group drew a lot of awareness to the plight of the South African wine industry and garnered incredible support from the trade, importers and consumers across the globe. “The year 2020 will probably go down in history books as one of the most challenging years for the industry, however despite this, we have learnt to adapt and have explored creative ways of engaging with our partners,” said Thompson.

In April the government halted the sale and transport of all alcohol products for five weeks in line with regulations to curb Covid-19.

When exports resumed, the industry faced a double whammy of reduced capacity at Cape Town port as a result of the pandemic and extreme weather conditions that impacted on shipping.

Thompson said despite a drop in volume at lower price points, it was heartening to see continued growth in the premium segment with wines over the R40 per litre price point growing steadily in value and volume.

“While still a relatively small volume segment for South Africa, the super-premium segment showed growth of 37 percent in volume,” he said. “This growth in the higher tiers highlights the work that WoSA has been doing to promote our quality wines at higher price points.”

Chenin Blanc grew 13 percent in terms of values and was the largest single export variety with a total export volume of 48.9m litres followed by Pinotage, which recorded a 12 percent growth.

WoSa said the Cap Classique category continued to realise strong growth at 17 percent and improved in terms of growing value and quality recognition overseas.

Thompson said the future was uncertain for the wine industry. “Our market managers will continue to explore options for the promotion of South African wine in our key markets with the focus on creating awareness around quality and therein growing the image of our wines.”

BUSINESS REPORT

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