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Published:  23 July, 2008

By Christian Davis

Rising costs and a recovering rand will cause problems for South African wine producers, particularly those in the budget price sector, according to senior figures at Distell, one of South Africa's biggest drinks producers. Etienne Heyns and Donald Gallow, Distell's director of international operations and group general manager, international, respectively, were in London recently visiting buyers, along with Distell Europe's general manager, Gerhard van der Watt, prior to formulating business plans for Europe. Gallow told Harpers: Costs have risen 15% and the rand is strengthening - it's going to cause major problems for South African producers at lower prices.' While Distell acknowledges the success of Western Wines' Kumala, it does not believe South Africa has established any true brands yet. The team is seeking to make Two Oceans South Africa's answer to Jacob's Creek and, according to Gallow, the brand is flying'.