LOWER RETURN ON INCOME
Wine industry hits doldrums
Wine producer body VinPro says higher wine prices will lift the industry to a financially sustainable level
SA’s wine industry is in a slump, with only a third of grape producers farming at sustainable levels and return on income dropping below 1%, according to wine producer body VinPro. VinPro chairman Anton Smuts said the average net farming income was about R45,000/ha compared with the R70,000/ha required in order to be financially sustainable. "We need to increase wine prices collectively to get to that level. Stop dumping wine at cheap prices in our export markets — it hurts the industry as a whole," said Smuts. Wine is one of SA’s largest agricultural exports, with the county’s nearly 100,000ha of vineyards, mostly situated in the Western Cape near the coast, accounting for about 4% of the world production. VinPro MD Rico Basson said it was encouraging that export value grew 10% to nearly R9bn, compared with volume growth of 3% to 428-million litres in 2016. "However, bulk wine, which is sold at lower prices, remains the biggest contributor in terms of volume." He emphasised the imp...
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