LIQUID INVESTMENTS
MICHAEL FRIDJHON: Many producers make wine for the love of it
SA produces between 7,000 and 8,000 different wines every year. No more than 1,000 are regularly stocked in wine outlets or on restaurant wine lists. Of these, fewer than 200 are "known value items" — mandatory to have on shelf — the wine industry equivalent of Iwisa maize meal. It’s not unreasonable to wonder about the other 6,000 or so products: what are they, why anyone bothers to make them, how their producers get them into the market. These are all questions about the long tail of the Cape wine industry and how it trades. For anyone curious about how anything as economically irrational as the wine business even functions, the first insight is that, for many of the players, the game is not about the money. Very few producers make a proper return on their capital investment. A minority earn enough to cover their running costs and a provision for the replacement of vineyards and equipment. A tiny minority make real money.The moment volumes rise above 25,000 dozen and the ex-cellar...
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.