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Cape Town - Remgro chairperson Johann Rupert has said the local wine industry faces challenging times, which require closer cooperation between industry giants like Distell and KWV.
Rupert was speaking in Paarl on Tuesday at the farewell function for outgoing KWV chair Danie de Wet.
Rupert said: "Let's work together. Instead of the constant niggling, let's build together."
Remgro owns a major stake in KWV's Stellenbosch-based rival Distell. Ironically, Rupert's conciliatory words come only weeks after KWV split off its strategic shareholding in Distell into Capevin Holdings (which was unbundled to KWV shareholders).
While the relationship between Distell and KWV has in the past been fairly tense, guests at the farewell included notable luminaries from both camps - including Remgro CEO Thys Visser, PSG chairperson Jannie Mouton and retail tycoon Christo Wiese.
Liquor industry sources said on Wednesday that it would make enormous sense for Distell and KWV to work together more closely - especially on the wine brands side.
But most cautioned not to read too much into Rupert's words. "People might be jumping the gun in thinking of a full merger between KWV and Distell - something like this would be many years off."
Rupert also welcomed Stellenbosch based investment firm PSG to the "club". PSG recently bumped its 26% stake in KWV to 31% after underwriting the company's R150m share issue.
Rupert said wine industry investment was not necessarily a big contributor to bottom line but still carried much responsibility.
"You might find that wine makes up around 2% or 3% of your bottom line; yet you spend 15% to 20% of your time on this investment."
In an overview of the challenges facing the local wine sector, Rupert said that one of the difficulties in the local wine sector was that consumers no longer followed brand categories.
"Nowadays it is about brands; people drink 'image'."
Rupert asked how many wine farms passed through three generations of ownership. "I'd say it's less than 10. What kind of brand etiquette can you build up like this? We need to build an image of a land that can produce good wine. Then we will be taken seriously."
He also questioned whether the local wine sector spent enough time and money on technology.
- Fin24.com