Local Wine Sales Rocket Amid Export Slump

Red-head riding a rocket. But which way?

While South African wine exports have tanked by over 10m litres in the first three months of 2011 compared to the same period last year, it is interesting to see local sales on the up. During the annual congress of Wine Cellars SA last week, Distell’s master statistician Elias Holtzkamp showed local vino sales for 2010 pegging 273,8m litres, up from 263m on 2009. And if forecasts are met, sales will jump to 284,4m litres in 2011.

But as in all agricultural sectors barring coffee made from civet poop, what you win on the swings you lose on the roundabouts. Sales of local brandy are falling like a Daniel Carter up-and-under: 39m litres for 2010 compared to 47m in 2007. Forecast for 2011: 37m.

The effect of this on the grape-farming industry is elementary when one remembers that five litres of wine makes on litre of brandy?+¦-+???+¦-ú?-¦?+¦-+?-+..do the math on what the decrease in brandy sales means to grape-growers.

Of red wines, over 80% of sales are still at price points of below R40 a bottle ?+¦-+???+¦-ú?-¦?+¦-ú?+¦+¦ make that 90% in the case of white. As Holzkamp rather abruptly said: “If you’re selling wine at R80 a bottle the future doesn’t look that good.”

A question from the audience of wine farmers asked about the inroads American behemoth Gallo is making in the SA market since introducing its cheap-and-cheerful Barefoot wine range last year.

“Not at all,” Holzkamp answered. “We’re not picking it up on the radar screen.”

Jos le Roux, CEO of the Vinpro organization which also represents wine farmers’ interests, must have breathed a huge sigh of relief at this as his chairman, Abrie Botha, distributes Gallo in his capacity as chairman of Namaqua. Vinpro members ?+¦-+???+¦-ú?-¦?+¦-ú?+¦+¦ South African wine farmers – would be quite peeved if one of their own was importing foreign product.

A Namaqua insider, however, told me that Gallo sales are going ballistic and the only reason they are not popping-up on the radar is that Nielsen, reports have not yet collated them. Someone is going to be the moer in next year this time.

 

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