Underpaid SA wine producers 'undermine' industry, limit growth – Vinpro chair | Fin24
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Underpaid SA wine producers 'undermine' industry, limit growth – Vinpro chair

Jan 18 2019 19:33
Carin Smith

Cape Town – It is time for those wine producers, directors of wine companies and their agents who are accepting prices that are "too low" to wake up, Anton Smuts, chair of Vinpro, said on Thursday.

He said the prices South African wine producers obtain are still far too cheap compared to what overseas producers get paid.

In his view, SA wine producers still need to play catch-up to reach sustainability.
Vinpro is a non-profit company which represents 2 500 SA wine producers, cellars and industry stakeholders. The annual Nedbank Vinpro Information Day took place in Cape Town on Thursday.

Smuts said those who accept these very low prices, both domestically and on bulk exported wine, are shooting the whole industry in SA in the foot.

"You are undermining our industry and limiting growth," cautioned Smuts.

'Shift the bar'

"Don't we need to shift the bar? Selling less for more maybe? There is anyway less available to sell. Is there not a much better return with price optimisation?"

Another issue he raised was what he called the SA government "throttling the local wine industry via National Treasury".

"The state earns a total of R6.8bn from the local wine industry, compared to the total income for producers of R5.8bn. Yet further inflation increases will impact the wine industry even further, even leading to job losses," he said.

"Isn't the state killing the goose laying the golden eggs for them? With wine producers replacing vines with other alternatives, does this add as much to GDP?"

Smuts said the wine industry was proud to be involved in transformation initiatives and skills development in the sector, but without financial assistance from government it was not sufficient.

For instance, SA is part of BRICS, but Australia, which is not a BRICS member country, has a free trade agreement of zero import duties with China, while the SA wine industry must pay duties there.

Smuts did, however, thank the Western Cape government for its continued support to the wine industry.

"Producers need to invest about R13bn to replace old vineyards over the next 10 years. How will we achieve this with below par income?" asked Smuts.

"We need to negotiate for sustainable prices."

This is on top of the challenging circumstances created for the industry by the drought over the past four years. It is causing problems of vine and crop losses.

"Even though some dams are now fuller, it takes years for vines to recover from the impact of the drought," said Smuts.

It is expected that this year's crop will be the second smallest – if not the smallest – in recent years.

vinpro  |  wine  |  agribusiness  |  agriculture


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