A bottle of wine is always a good idea. However, high inflation and high interest rates are affecting how wine consumers are choosing to spend their money, leading to a drop in wine sales in South Africa’s top export markets.
Wine export promotion body, Wines of SA (WoSA) reports that SA’s wine exports fell 17% to 306-million litres in 2023. The problems are a combination of logistical hardships at the Port of Cape Town, lower harvest – with production volume having decreased 14% - and the normalising stock levels which built up during the Covid-19 pandemic and the restriction on sales.
Speaking to Business Day, communications manager for WoSA, Maryna Calow said, “With stocks normalising, it was expected that bulk wine exports would decline to more normal levels in the short term,”
The UK and Germany are two of SA’s largest markets which account for about half of total wine exports. A respective 3% and 16% export decline is reported there with the largest decrease being to the US which imported 12-million litres of wine – about 50% less than in 2022.
Calow noted that the drop in US wine sales and consumption which impacted imports from SA was in line with the general trend.
“We are also seeing some of our competitors being impacted, for example Argentina (-28%). Most importantly, the US volume drop is heavily driven by bulk wine exports (-72%). It is likely that the combination of SA not having a lot of bulk wine available and an improved US harvest has negated the need for bulk wine imports to supplement the US’s wine shortage,” she added.
The challenges are likely to continue according to WoSA, but various SA wine industry bodies are working hard to change things around.
• This article was originally published on Business Day.