Raise profitability or die

That was the somber message from Wines of South Africa’s chairwoman at the opening of Cape 2018 in Cape Town today (September 12).

Carina Gous told a packed auditorium at the Cape Town conference centre that profitability was a “huge, huge challenge” with many farmers giving up growing vines. A survey carried out in 2016 showed that 5,000 hectares (5% of South Africa’s total vineyards) were lost in the five years since 2010.

Showing a graph of all the leading wine-producing countries with South Africa at the very bottom in terms of profitability, Gous said that SA needed to “head north-east - or north.  Otherwise the South African wine trade cannot be sustainable”

She said producers, brand owners need to concentrate on the on-trade and specialist retailers and improve quality and value, “otherwise we will not have a sustainable future,” she warned.

She said exports in recent times had gone from 25% of total, peaked at 60% and was now 52% but she was concerned at the amount being shipped in bulk. She called on the industry to concentrate on packaged wines which were profitable and would mean more jobs for locals.

She said the situation was not helped by political uncertainty, unemployment was 27% but rose to 40% if you included people who had given up work; inflation, VAT increases and the volatility of the rand.

Gous used two words. during her presentation, from one of South Africa’s official languages: “Hunnuwa”, which means good fortune, living in harmony, respecting community and protecting the environment. She concluded with “Ubuntu”, which means humanity, ‘we are what we are’.