Wine producers angry at govt

Cape Town - Wine producers are blaming the Department of Trade and Industry (DTI) for shifting its export focus away from developed countries because of the global credit crunch.

Su Birch, the chief executive of the industry organisation Wines of South Africa (Wosa), said on Wednesday: "The US remains the fastest-growing wine market by value. It is thus a shame that the DTI has not factored the special characteristics of world wine economics into its strategy."

Without access to government funding, Birch said, Wosa's investment in the US market remained at R3.5m ($350 000) per annum. In contrast, Chile's generic spend had reached $6m and Australia's $25m, thanks to the support from their governments.

As a result, despite the continued growth in consumption of wine by Americans, South Africa's exports of packaged wines to the US had dropped from about 1m nine-litre cases two years ago, to some 760 000 cases in 2008, in sharp contrast to South Africa's stellar performance in other markets.

Almost 100 wine producer representatives met on Tuesday in Stellenbosch to discuss the parameters for the formation of a USA Producers' Association (USAPA), and according to Birch a majority agreed to cooperate with Wosa.

"With the growing number of positive reviews achieved by the country's speciality producers in highly influential US wine publications, any additional resources that can be targeted at this market will certainly help to build the South African category as a producer of excellent quality and value," said Birch.

USAPA hopes in its first year of operation to raise $500 000 in funds through membership fees and a percentage of FOB revenue generated by producers in the US.

Given its financial constraints, said Birch, to date Wosa had directed its efforts to those markets where it could achieve success on extremely tight budgets. "However, while South Africa was now the leading New World supplier to Germany, the Netherlands and Sweden, the country does need to make a concerted effort to realise the potential of the US market."

According to the International Wine & Spirit Record in its research commissioned by Vinexpo and released earlier this month, US consumers will buy a total of nearly 314m cases of wine in 2012, an estimated increase of close on 9% on 2008.

- I-Net Bridge