Wine Investment in South Africa - Cape Wine Academy

wine market. De Toren’s will be marketing ( through Bordeaux agents ) an en primeur, very
limited production wine, solely in Europe and the US next year, after it has been assessed
by Robert Parker. Owner Emile den Dulk’s belief in the quality of this wine and its
subsequent rating will help to create a demand for other top SA wines and will;
‘take SA wine to another level’ ( den Dulk, 2011 Appendix A ).
Wherever demand exists, businesses will appear to meet it, whether providing storage
facilities, transport, advertising or auction. Markets do not just appear, they evolve to answer
a need. It will take time to establish an efficient secondary wine trade in SA, but the seeds
are there.
The Asian wine market which now drives worldwide demand was built on the acquisition of
wine brands as status symbols and lifestyle indicators. The potential profit of being central to
the market was identified and a committed drive, fuelled by government, brought this to
reality; it bore little resemblance to an understanding of wine. Indeed many felt it was in
contradiction to decades of belief that the Asian palate was fundamentally different to
western palates and that fine wine was unpleasant to many Asian consumers. Perhaps a
lack of fine wine history, lack of understanding of the product or lack of wine culture should
be no barrier to establishing a trading market in South Africa. Perhaps what really matters to
potential wine investors is the numbers, and they certainly add up.
If the investor isn’t seeing that potential, some winemakers are. Beyers Truter’s missed
investment experience has him seriously considering buying some of his own stock, holding
it back and releasing in tranches. Truter has seen the vast capital income successful wines
could generate by initiating his own secondary market; he believes his ‘Diesel’ Pinotage
could easily sell at R750 a bottle a year or two after initial release and could net the winery
some R750,000 more than they will otherwise get. But Truter is reluctant to do this, he cares
about his customers and isn’t about to take advantage of them;
‘I can’t, or won’t, hold ( stock ) back as it upsets customers…it is basically screwing
them’ ( Truter, 2011a Appendix I ).
10.3 Creating a portfolio
Presently, the South African investor is buying foreign wines, probably Bordeaux. First
Growths provide the headlines but there is a growing polarisation of the wine investment
market. At the top end there seem plenty of people willing to pay R50,000 or more per case
and others looking for more stock for less outlay, say under R20,000 per case. There is not
much in between and this provides an opportunity for SA wines. There are currently no SA
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