Wine Investment in South Africa - Cape Wine Academy

history of fine wines. The isolationism of the 70’s and 80’s saw key markets without access
to SA wines and often SA wines were out of touch with changing European and American
tastes. Re-entry to the world stage has seen real progress in production and quality and
considerable international competitive success. The key word is potential and for those
willing to take the chance there exists a real possibility of profit in the future. The Nederburg
and Cape Winemakers Guild auction results show how SA fine wines increase in value.
Many SA wines are proving themselves capable of longevity and are of investible quality and
there seems general agreement that establishing an effective wine trading market in SA is
only a matter of time.
The benefits of a wine investment trade in South Africa could be significant. It could attract
foreign investment. The Government would receive revenue via Duties and VAT.
Employment opportunities might arise in new businesses and expanded existing businesses
such as investment companies, storage facilities, exporters, brokerages and auction houses
with margins available all along the chain. Wine producers would see an increased demand
for investment wines, pushing up quality levels and producer income and promoting ‘brand
SA’ worldwide. The investor would be able to purchase and trade icon wines made available
through a secondary trade and potentially generate wealth.
There are very few ‘downsides’ to investment in SA wine. But, for this to happen, four things
are necessary.
Firstly, there needs to be a greater recognition of SA’s icon wines, especially abroad, and an
acceptance of their inherent quality and longevity.
Secondly, there needs to be an en primeur offering of such wines to maximise profit potential
for investors and make future returns more likely.
Thirdly, there needs to be a platform for the buying and selling of such wines on a secondary
market via auctions or private sales ( and a review of legal issues surrounding this ).
Lastly, there needs to be more people successfully investing in ( European ) wine as an
asset and that could lead to people brave enough to pioneer the investment in SA fine
wines; to be the first to invest money into holding and trading SA wine with a return maybe
years away.
A risk, yes, but less than many other asset classes and offering, perhaps, returns in double
digits or at least something nice to drink.
‘Wine should always be savoured, but those who choose to both save and
savour wine may be making a wise decision after all’ ( Fogarty, 2006 ).
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