Wine Investment in South Africa - Cape Wine Academy

important to establish to the world that SA icon wines are exactly the same, unique to an
area or Estate and that production is limited and cannot be increased on demand.
It has taken hundreds of years to establish confidence in most investment wines, but once
established, reputations are hard to damage. Weaker, perhaps rain affected vintages in
Bordeaux such as 2003 or 2008 frequently produce wines which are easily challenged by
many SA wines, yet they still sell at auction and for a price their quality fails to justify. SA
wines will only be judged on their quality, most reputations are yet to be built. As Jamie
Goode says, these are exciting times as icon wines and areas of potential are being
discovered every day;
‘South Africa's best wines are yet to be made, which is encouraging, I suppose.
There is much potential’ ( Goode, 2009 ).
Confidence, though, will take time to build and as CEO of Cybercellar Fiona Phillips says,
‘certainly the rest of the world isn't ready for investment in SA wines’ ( Phillips, 2011 ).
Chapter 9
9.1 The Cape Winemakers Guild Auction
Since 1982 the Cape Winemakers Guild has promoted excellence in winemaking. Members
are invited to join after nomination and years of proving their worth. Its annual auction fulfils
many criteria. Originally to showcase its members’ best wines, a major aim of the event was
to raise money for charity. Some believe things may have changed. For some wine estates it
is absolutely necessary for their financial health ( Truter, 2011a Appendix I ) and necessary
as a shop window to sell their wines. For others, it provides an opportunity to buy and resell
after considerable mark-up ( Wine Magazine, 2007 ). For Truter, it is a lot of work and one
could question how genuine it is in its original intent ( Truter, Ibid ). Certainly, few of its
wines are available at retail later and those that are have incurred the secondary trade profit
margin increase. Some question the quality or longevity of auction wines, most of which are
released very young. The 2010 auction saw more than 13,780 bottles sold at an average of
R280 per bottle, not unreasonable as long term investments for wines with commercial
desirability. Possibly the average consumer would balk at R280 a bottle and that may be
why only 35% voted the CWG a ‘relevant’ organisation in 2007 ( Wine Magazine, 2007a )
but as a means of acquiring limited quantity wines as an investment it is a vital part of any
secondary trade. Figures in Table 12 show that private buyers are now the majority of the
audience and that they are spending an average of more than R15,000 each ( though
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