Industry body South Africa Wine (SA Wine) has emphasised the importance of South Africa’s trade relationship with the US under the Africa Growth Opportunity Act (Agoa) trade regime, particularly since R798-million of wine exports were made to the US last year.

South Africa exports R10.5-billion worth of wine every year to more than 125 countries worldwide, with the US being one of the highest value-generating destinations.

SA Wine’s statement, issued on November 1, comes ahead of the US-Africa Trade and Economic Cooperation Forum on November 2 to 4, where key Agoa issues and opportunities for expansion will be discussed.

SA Wine says many jobs have been created through the import, marketing and selling of local wine to the US market and that the current trade relationship with the US gives the industry a competitive edge through tax relief assists – which helps to price wine competitively.

CEO Rico Basson adds that more competitive pricing allows for a better return on investment that can be invested in vineyards and employees, which is what the industry needs.

For example, with South Africa having exported about 25-million litres of wine to the US in 2022, valued at R798-million, it equates to a tax benefit of up to R57-million, assuming all wine imports made use of the tax relief.

Basson says that while this may seem small along with South Africa’s share of the US market, which is between 1% and 2%, it is nonetheless an important growing premium market for South African wine.

Another industry body, Wines of South Africa, says if South Africa were to be excluded from Agoa, which is a possibility owing to concerns about the country’s relations with Russia, it could hamper the industry’s growth in that wine would end up on the shelves of US stores at a higher price.

Basson stresses that South Africa not only needs the benefits created by Agoa, but also needs the overall good business relationship with the US, to positively impact on the wine tourism industry as well as South Africa’s reputation as a credible role-player in the international trade environment.

He elaborates that direct air access to and from the US brings more visitors to South African shores and creates more education and exposure about the Cape Winelands. “In this way, we build ambassadors who will want to find South African wine in the US when they return.”

Both organisations agree that the renewal of Agoa, with South Africa included, will benefit the US economy too, as South Africa produces some of the best wines in the world with a diverse line-up of grape varieties.

Basson hopes to see a timeous renewal of this important agreement before it is due to expire in 2025.