Last update08:00:00 PM GMT

06 Aug 2014

Wine farmers pressed to a pulp

R1 extra per bottle of wine.

As things stand, the wine farmer cashes out only 52c from a bottle that sells for R30. This needs to change, says Vinpro executive director Rico Basson.

That only a tiny percentage of the retail price finds its way down the supply chain not only hurts farmers but inevitably affects the nearly 275000 employees in the industry.

Despite having the best exports on record last year, only about a quarter of wine farmers earn an income sufficient to justify the investments they have made.

"We are losing 100 wine farmers and 1000ha of vines per year," Basson says.

And this at a time when global wine stocks are at their lowest levels in 30 to 40 years.

Last year's fears that a global wine shortage would hit our shelves were overblown, but there is still opportunity for South African wines to elbow their way deeper into foreign markets.

South Africa was either the eighth- or ninth-largest producer last year according to differing statistics,Wines of South Africa CEO Siobhan Thompson said.

The past two decades have been a time of growth for the local industry, with exports ballooning from 22million litres in 1992 to more than 525million litres this year, and the reach broadening from 20 countries to 139 in the same period.

The industry earned about R7.2-billion in foreign exchange last year and this year looks promising so far, Basson said.

Some wines might be luxury goods but more often the fruits of the vine now fall in the category of fast-moving consumer goods.

"Most wines are opened within three hours of being purchased," he said.

The problem is that producers work on very thin margins - and they have been mechanising for two decades.

"This did not start because of the strike [two years ago in Western Cape], it has been going on for years as the wine farmers try to improve their yield," he said.

The industry is working on a strategic framework that will be finalised by year end and presented to the Department of Agriculture.

Part of that framework would be to increase the percentage that gets to the workers and the farmer, Basson said.

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