Time for Wine Industry to Rock Complacent Government

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The latest study on the macro economic impact of the SA wine industry would make for exciting reading if it didn’t highlight the slackness of the local and national government in recognising the vinous jewel in the South African crown. According to the independent study commissioned by the SA Wine Industry Information and Systems, the wine industry’s impact on the national Gross Domestic Product (GDP) grew to R26,2bn in 2008. This represents a substantial increase in the wine industry’s contribution to the national GDP since the last study. In 2003, when the previous study was done to measure the wine industry’s macro economic impact on the economy, the industry’s annual contribution was R22,5 bn.

Of the R26,2bn GDP created in South Africa by the wine industry, about R14,2bn remained in the Western Cape. The wine industry supports employment opportunities to the tune of 275 600. The relative labour intensiveness of the wine industry is specifically the result of the intensive labour production methods which are followed in the primary agriculture. In the Western Cape, the wine industry in total is responsible for 8.8% of total employment compared to 2.2% for the country as a whole.

Compared with the 2003 study, it is evident that the wine industry as a whole did somewhat better over the 2003 ?+¦-+???+¦-ú?-¦?+¦-ú?+¦+¦ 2008 period. Total turnover grew by 79%. This growth can be attributed mainly to the excellent export performance (close to doubling in current rand value terms since 2003). The growth in value of domestic sales in nominal terms, over the period 2003 ?+¦-+???+¦-ú?-¦?+¦-ú?+¦+¦ 2008 amounted to 76%. These figures also indicate the much slower growth in primary producers’ income but an escalating tax haul by government. Tax and excise amounted to R3,5 bn in 2008, growing by 71% since 2003.

Okay, so what have we got? Jobs. A major exporter. A R3,5bn contribution to the state from taxes and excise. Not to mention the myriad diverse benefits that befall a country with an internationally renowned wine industry.

These benefits and the fact that the wine industry is a major economic powerhouse ?+¦-+???+¦-ú?-¦?+¦-ú?+¦+¦ one growing in strength ?+¦-+???+¦-ú?-¦?+¦-ú?+¦+¦ has largely seemed to pass the government by. Government’s appreciation for the wine industry seems to be limited to its Fat Cats ordering of Vergelegen V and Meerlust Rubicon with a well-done T-bone at the Butcher’s Shop on Sandton Square.

First up, give the industry a break on taxes and excise. And how about starting with the next budget, due later this month? Putting wine into the “sin tax” category is not only disrespectful, but displays ignorance of the product.

Then how about some subsidising of the major inroads wine producers have made to address social issues on their properties? Despite the pink liberals still wishing to tarnish wine farmers with a broerderbond/dop-system brush, farmers are making huge investments in schools, housing, cr?+¦???+¦?+¦-+?+¦+ëches, clinics and general up-liftment. Some subsidising here would be in order.

,Wine farmers are also involved in creating opportunities for their employees through training and skills enhancement. Case in point, check out the SKOP (senior cellar training) courses sponsored by former pupils of the Elsenburg Agricultural College. These courses aim to raise the skills levels of cellar staff, leading to better employment opportunities and practical empowerment as opposed to the hand-out, feel-good variety.

How about government recognising these proactive policies in the wine industry with assistance in export regulations, tourism subsidies or sponsoring methods to assist the wine industry in showcasing its product on a generic basis when the eyes of the world look our way from June 11 to July 11 this year?

There is however a slight spanner in the works. Yes, the wine industry has proved itself to be a major economic driver. Government should start taking the industry seriously by means of a strategic action plan to further harness the industry’s tremendous potential.

The problem lies in the middle: who from the wine industry is talking to who at government level? And if there is somebody doing this, why is no one listening?

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One thought on “Time for Wine Industry to Rock Complacent Government

  1. From DECANTER

    New Zealand ‘could lose top slot’
    February 5, 2010
    Rebecca Gibb

    The New Zealand wine industry could lose its premium reputation if government does not support its marketing efforts.

    The premium position of New Zealand’s industry is ‘as fragile as Pinot Noir’, Saatchi & Saatchi CEO Kevin Roberts told this week’s Pinot Noir 2010 conference

    He called on winemakers to lobby the national government to provide funding for global marketing, or risk losing their position on the world stage.

    ‘It is vital you get the New Zealand government to help because as individuals you have not got a prayer.

    ‘Otherwise, others like the USA, Argentina, Chile and South Africa will jump in. You need to secure your premium position,’ Roberts said.

    New Zealand producers currently fund the wine industry’s marketing efforts but Roberts told the industry, ‘You should place pressure on the government and lobby very hard.’

    New Zealand Winegrowers marketing director Chris Yorke told decanter.com they were putting together an application for government funding.

    ‘Roberts said we have to get out there and sell the wine. There’s a strong case for the country to support the wine industry in our marketing efforts and we are looking to put a case together,’ he said.

    New Zealand Winegrowers is funded by producer levies and pay-as-you-go promotions totaling NZ$9 million (Gò¼+¦Gö£GòóGö¼Gò¥+ô+¦-ú+ô+¦+ª4m). Government funding could help promote New Zealand wines in export markets.

    Sam Lewis, director of New Zealand Trade and Enterprise’s food and beverage taskforce said the government was investing NZ$19m in the wine industry over four years.

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