Despite the improved performance of the rand, wine festival Standard Bank WineX founder Michael Fridjhon highlights that the South African wine market has increasingly become an exciting and attractive destination for global consumers.

Fridjhon notes that South Africa’s wine industry is poised for a comeback, driven by rising local demand and the growing popularity of Cap Classique and Chenin Blanc in China, with exports of Cap Classique to China rising by 4% in 2023.

“We have had quite a lot of feedback, including by one of the Chinese judges at this year’s Trophy Wine Show in Paarl, in the Western Cape, talking with great enthusiasm about the appeal of Cap Classique in the Chinese market. Chinese Master of Wine Fongyee Walker has stressed that the acidity is gentler when compared with traditional champagne from Europe,” he says.

Fridjhon highlights that there is also an opportunity for the Department of Trade, Industry and Competition to take advantage of the relationship that the country has with China through intergovernmental organisation Brics, which he contends has not been exploited, in this respect, until now.

He points out that there was an opportunity for the country to profit from a trade dispute between China and Australia, which cost the Australian wine industry over $1-billion a year over the last two to three years. However, he notes that the dispute has since been resolved and the opportunity lapsed with the government not making any effort to capitalise on the dispute for the benefit of the local wine industry.

He notes that the Australian wine industry is already selling large quantities of wine to China, and as a result there is already a notable decrease in South Africa’s market share.

Challenges

Fridjhon says the wine industry enjoys an international reputation for its adherence to regulations aimed at maintaining product quality and traceability. However, despite its successes it finds itself in constant competition with other industries pursuing the “rare resource of land” in the Western Cape.

“It’s very hard to fight urban creep. More land that was and should be zoned for agricultural activity is being zoned for residential use, usually at the cost of vineyard land, which is closer to the Cape Town port and major industrial and production areas.”

He also highlights the high cost attributed to vine replanting and vineyard viruses, which shorten the productive life of vines. The most prevalent virus is the grapevine leaf roll disease which compromises the vine’s ability to ripen the grapes properly, affecting the texture and flavour of the fruit and potentially leading to crop reduction.

The result is that certain varieties – such as the “important quality varieties cabernet sauvignon and merlot” – must be replanted sooner than would normally be the case. Fridjhon explains that the cost of replanting has exceeded the rate of inflation and that wine producers might have to pay between R500 000/ha and R1-million per hectare to replant.

However, he highlights that lower production volumes could be effective in helping to increase prices and magnify more efficient farming practices, especially through consolidation, adding that there could be a rebalancing within the industry within the next three to five years.

According to 2023 figures, South Africa’s wine industry achieves sales of roughly R35-billion a year and exports 40% of its production. Fridjhon notes that this industry is a sizeable employer and is one of the largest employers in the Western Cape province.

Further, the industry’s contribution to GDP in 2022 amounted to R56-billion.

Fridjhon also points out that tourism is a major contributor to the economy and that Cape wine, and its vineyards, are an attractive proposition for wealthy international travellers.

He suggests that the younger generation of winemakers are determined and very conscious of the need to enhance their wine making skills. Their attendance at important international conferences and their participation in competitions is a positive marker of the industry’s competitiveness.

To that end, having started life in 1976 as The Rand Daily Mail Wine Show, WineX is the longest running and largest consumer wine event in Southern Africa. This year it was hosted between October 30 and November 1 in Sandton, Gauteng, by financial services company Standard Bank Private.

Fridjhon notes that since both enterprises deal with clients who are financially stable to well off and looking for leisure activities and the enjoyment that food, wine and travel can bring, there is a real unity in their objectives. WineX offers all these features – and more – under one roof.