LABOUR COST WOES
Harvest of wine grapes shrivels
Wine producers and cellars will find it difficult to absorb cost increases, says VinPro
A smaller 2016 wine grape harvest and the ever-increasing production and labour costs have added to wine grape producers’ woes. Producers have also bemoaned the increase in excise duties on wine and brandy announced by former finance minister Pravin Gordhan in his budget speech in February, as the sector continues to struggle to make significant profits. Excise increases of 8.8% on wine and sparkling wine and 8.5% on spirits were announced in the budget. According to wine producer body VinPro, in a depressed economy where wine retail price increases are below inflation, wine producers and cellars will find it difficult to absorb these increases. VinPro says the average wine producer’s profit margin has been under pressure for the past 10 years. Record harvests from 2012 to 2014 gave total income a boost. Income weakened in 2015 and 2016 due to smaller harvests and grape prices not keeping up with inflation. According to the 2016 VinPro Production Plan Survey due for release in April...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.