SA wine prices predicted to recover again in ‘next few years’

Published: 19 October, 2020

The Covid-19 pandemic has had a far-reaching effect on wine-producing countries across the globe, not least South Africa.

Apart from the financial effect of varying restrictions on South African liquor sales locally and overseas since March, it coincided with a decrease in sales towards the end of 2019, which led to a surplus of about 290 million litres of uncontracted wine, according to South African Wine Industry Information and Systems (SAWIS).

While it was “inevitable” that this oversupply would have a negative effect on wine prices, the industry was currently working on various solutions to reduce stock levels and “wine prices should recover again in the next few years,” said Yvette van der Merwe of SAWIS during recent regional webinars held by Winetech and Vinpro.

The plans, it was said, include stimulating the demand for South African wines locally and internationally, manufacturing hand sanitisers of the current stock and assigning grapes from the 2021 harvest and onward for the production of grape juice concentrate through long-term contracts.

The trials and tribulations of South Africa’s wine industry have been well documented, with a ban on moving wines early in the pandemic preventing exports, compounded by a two-month ban on domestic alcohol consumption.

In addition, following two smaller harvests in 2018 and 2019, the 2020 vintage has returned near normal average annual volumes, as Harpers recently reported, but with a funnel of distribution that has been narrowed following both those short years and the export shutdown.

The resultant surplus will almost certainly further depress prices, hitting producers and make future recovery more difficult at a time when the Cape's wine industry has been striving to gain a more premium export footing.

In more positive news, it was revealed at the end of July that equality in the South African wine industry had taken a leap forward with 94 students from disadvantaged backgrounds having passed their exams to become qualified sommeliers.

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