South Africa: Record bulk wine exports could give industry a hangover

(ENCA) - Driven by surging demand for bulk wine, SA is looking to grow total exports to a record 500m litres in 2013, almost 100m litres more than the record set in 2012.

But many market players think it’s not all good news; they view the surge in bulk wine exports as more of a threat than a blessing.

“Bulk is a complete disaster for the SA wine industry,” says expert and columnist Neil Pendock “We are losing jobs and the defining quality characteristics of SA wine.”

“It is not good to be known primarily as a bulk exporter,” agrees Erhard Wolf, Distell’s grape & wine supply GM.

SA is indeed at risk of becoming just that. Bulk wine exports have soared from 32,3% of SA’s total wine exports in 2005 to double that level in the first five months of 2013.

“The global trend is towards bulk wine exports,” says Yvette van der Merwe, SA Wine Industry Information & Systems (Sawis) executive manager. “But SA is at the extreme.”

SA, says Van der Merwe, is regarded as a New World wine producer together with Argentina, Australia, New Zealand, Chile and the US. Across those six countries, which account for a quarter of global wine exports, packaged wine makes up 53% of total exports and bulk wine 47%, she says.

The surge in demand for bulk wine was sparked by drought in the world’s three biggest wine-producing countries: France, Italy and Spain. The International Organisation of Vine & Wine (OIV) reports a combined 12% fall in the three countries’ wine production. Together, they produce 55% of the world’s wine