South Africa threatens 'wine war' over British bulk buying

Aug 24, 2012

British supermarket habit of bottling South African wine here brings threat of retaliation

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BRITAIN could soon be facing a 'wine war' with South Africa, as the South African government announced plans to protect its lucrative industry from the rising British trend to import wine in bulk rather than bottled.
British retailers including Tesco and Sainsbury's are increasingly bottling the bulk wine themselves, in efforts to cut costs and package the products more appealingly for UK customers.

The Guardian reports that so far the move has led to as many as 700 job losses in South Africa.
To combat the damage, South Africa's government has suggested it should apply the same policy when it comes to Scottish whisky. Last year South Africa imported £129m worth of whisky from the UK and exported £75m worth of wine to Britain.

Stephen Hanival, chief director of agro-processing at the South African Department of Trade and Industry, said: "Why shouldn't South Africa be importing bulk whisky from the UK and bottling it locally, so that we can at least attempt to prevent some of the job losses that we've seen up to now spreading to other parts of the economy?"

South Africa has more than 100,000 hectares of grape-producing vines and employs around 275,000 workers in the wine industry.

In the first six months of this year, bulk export figures were up by 31 per cent while exports of wine packaged in South Africa were down by 9 per cent. The wine exporters' association Wines of South Africa (Wosa) estimates that for every 120m litres sold in bulk 107 jobs are lost.
However, Johann Krige, chairman of Wosa, told the South African newspaper Business Day that the retaliatory measures would be pointless.

"This has been going on since the 2008 financial crisis," he said. “Other wine-producing regions such as Australia, New Zealand and California have the same issue."

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