South Africa’s wine and brandy industry shows remarkable growth despite challenges

SA win industry see a R10 billion growth in revenue. Picture Ian Landsberg

SA win industry see a R10 billion growth in revenue. Picture Ian Landsberg

Published Feb 3, 2024

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Despite the country's port crisis, which affected exports, South African wine exports surpassed R10 billion in revenue.

According to South Africa Wines (SAW), the year 2023 will undoubtedly be remembered by the world's wine fraternity as one of the most challenging years as SA wine exports declined by 17%, resulting in a total volume of 306 million litres.

“The silver lining for South African producers can be seen in the positive value growth of total exports to a respectable US$540 million (R10 billion), despite the volume decline.”

“The consistent positive ratings and accolades achieved by South African

wines have most certainly solidified our positioning in international markets. Quality remains our focus, and the consistency that we have seen, along with viticultural improvements and embracing new technologies both in the vineyards and cellars, will allow for a continued upward trajectory in this regard. This is why buyers remain confident in their support of our wines,” said Wines of South Africa (WoSA) CEO Siobhan Thompson.

WSA also noted improvements in the brandy industry.

The Macro-Economic Impact report by FTI Consulting, which measured the wine and brandy industry's impact on the South African economy for 2022, revealed compelling insights into the industry's multifaceted role in driving economic vitality and inclusivity.

“Amid the challenges posed by the global pandemic, wine tourism has proven to be a resilient lifeline for the industry, elevating its economic significance and showcasing its adaptability,” said Rico Basson, South Africa Wine CEO.

He said the growth from 14.7% in 2019 of total winery turnover attributed to wine tourism to 17.3% in 2022 underscores its pivotal role as a revenue source.

He said in 2022, wine tourism contributed R9.3 billion to the South African economy, surpassing pre-Covid-19 levels and significantly outperforming the 2019 contribution of R7.2 billion.

In 2022, the South African wine and brandy industry showcased its significant impact on the country's GDP, generating an economy-wide contribution of R56.5 billion, constituting 0.9% of the nation's GDP at market prices. This highlights the industry's capacity to stimulate economic activity across various sectors, underscoring its crucial role in adding value and overall economic vitality.

“The wine and brandy industry's activities generated a fiscal contribution of R19.26 billion economy-wide, also emphasising its role as a substantial source of government revenue, accounting for 1.23% of the nation's total tax revenue in the 2022 financial year,” said Basson.

Basson said the report clearly shows evidence that overall growth was constrained due to the negative impact of more than 200 days of alcohol bans during Covid-19, policy uncertainty, the lack of enforcement on illicit alcohol trade, logistical challenges experienced at ports, load shedding, and disruptions due to geo-political factors.

“This has placed significant pressure on the financial position of producers and wineries and has hampered the pace of re-investment for future growth.”

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