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SA not seeking wine war with the UK

Aug 22 2012 16:01 Sapa

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Cape Town - While South Africa is not seeking a "trade war" with the United Kingdom over a decision by retailers in that country to import wine in bulk rather than bottles, it will be looking at bulk importation of whisky.

Briefing reporters in Pretoria on Wednesday following cabinet's fortnightly meeting, trade and industry chief director agro-processing Stephen Hanival said the UK retailers' decision posed a "serious risk" to the local wine industry.

Earlier, government spokesman Jimmy Manyi said Cabinet had noted the decision to switch from bottled to bulk wine, and had approved a series of developments to reduce the impact.

Among the nine proposals it had come up with was a "study on the impact of possible bulk imports of whisky from the United Kingdom".

It also planned a "series of engagements to highlight the negative socioeconomic costs of the UK retailers' demand for bulk wine, and interactions with the SA Revenue Service".

Hanival said an estimated 300 to 700 bottling-related jobs had been lost in South Africa's wine sector as a result of a "very significant" swing to bulk exports since 2006. Last year, more than half of the wine exported was sent in bulk.

"This is a serious risk to the South African wine industry," he said, adding that it was being done "under the guise of environmental concerns".

UK retailers were seeking to import wine in bulk and bottle it in that country because this was cheaper, he said.

Retailers in the UK maintain that the bulk import of wine is more cost-effective and more environmentally sound.

Hanival warned that such "quasi-environmental standards" could well spread to other sectors in South Africa, including fruit juice exports, and spirits such as brandy.

Asked if looking at the possible bulk import of whisky to South Africa from the UK might not spark a "trade war", he said he hoped it would not.

"We certainly hope this development on bulk wine doesn't lead to a trade war... with the UK... However, South Africa does have a responsibility to protect its trade," Hanival said.

He noted that South Africa imported whisky to the value of R1.7bn from the UK, and exported R997m in wine.

Manyi said among the steps that would be taken was a process to develop a five-year strategy for the wine industry to help place it on a sustainable growth path trajectory.

Government would also engage the wine and packaging industries to develop innovative packaging solutions, with the emphasis on sustainable packaging, he said.

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jimmy manyi  |  wine
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