Western Cape Business 2017 edition

OVERVIEW
• Wages valued at R950-million
• Additional R600-million job
creation by suppliers in the
value chain
Three of South Africa’s grapegrowing
regions are located in
the Western Cape:
• Olifants River: The river flows
from the Cederburg Mountains
westwards towards the Atlantic
Ocean via Namaqualand.
• Berg River: The Du Toitskloof
Mountains are the main geographical
feature of this region
named for the strong-running
river that irrigates the fields of
grape varieties such as Red
Globe, La Rochelle and Bonheur.
• Hex River: The river runs past
the Matroosberg where snow
falls are a regular occurrence.
Popular varieties are La Rochelle,
Sunred Seedless and Barlinka.
Wine
A bottle-making factory in
Gauteng is doubling its capacity
because Cape wine exports
are rising so quickly. Exports
from the Western Cape reached
R8.6-billion in 2015.
Nampak told Business Day
in 2016 that the main factor in
increased orders from its Cape
wine buyers was the Economic
Partnership with the European
Union, allowing easier access into
the EU for Southern African goods.
Total exports of wine out of the
Cape have grown from 50-million
litres to close to 450-million,
with many of the new sales going
to China.
The Chinese market was valued
at R240-billion in 2015 (IWSR) and a
joint venture between Leopard’s Leap and Yangzhou Perfect (51%) has
bought the wine farm Val de Vie to make wine to export to that country.
The wine is branded L’Huguenot.
There is a move to try to shift South Africa’s focus away from
bulk wine sales, to bottled wines. The website beveragedaily.com
quoted the managing director of Origin Wines stating that for every
10-million litres of additional wine bottled in South Africa in 2016, additional
direct income of R200-million should accrue to the Cape Winelands.
The decision by Britain’s electorate to extract the country from the
EU will lead to some complications, but Western Cape Minister for
Economic Opportunities Alan Winde believes that the new situation
could lead to many new opportunities. The EU may push for the reduction
in some of the figures set for imports (on the basis that a chunk of
the allocation would have been going to Britain), but Britain will surely
want to negotiate a good deal with South Africa as quickly as possible.
There are over 3 500 wine producers in South Africa, with the large
majority located in the Western Cape.
Wine is produced by estates, independent cellars and producer cellars
or co-operatives. The Distell group runs five distilleries and seven
wineries in the Western Cape, produces about a third of the country’s
natural and sparkling wine and is ranked 12th in the world in terms of
global wine volume sales.
The multi-brand KWV was sold in 2016 to consumer investment
group Vasari. The reported sale price was R1.15-billion. Niveus, the
previous owner of KWV, retains the company headquarters building
in Paarl (La Concorde) and the Laborie wine estate.
Wellington Wines is a new venture that arose from the merger of
the Wellington Co-operative and the Wamakersvallei Co-operative.
DGB is a large wine and spirits company that makes much of its own
product at five famous wineries. These include Boschendal, Bellingham
and Douglas Green. Edward Snell & Co is a wine and spirits wholesaler
that also makes its own line of spirits. Fourteen brandy distilleries can
be visited on the Western Cape Brandy Route and a further six on the
R62 Brandy Route on the road east.
ONLINE RESOURCES
Integrated Production of Wine: www.ipw.co.za
National Agricultural Marketing Council: www.namc.co.za
Nietvoorbij Institute for Viticulture and Oenology:
www.arc.agric.za
SA Wine Industry Information & Systems: www.sawis.co.za
South African Brandy Foundation: www.sabrandy.co.za
South African Table Grape Industry: www.satgi.co.za
Western Cape Department of Agriculture: www.elsenburg.com
Wines of South Africa: www.wosa.co.za
79 WESTERN CAPE BUSINESS 2017