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In South Africa, 39 percent of all wine producers are recording losses. This was published in a report by the non-profit organisation Bureau for Food and Agricultural Policy (BFAP). According to the report, only twelve percent of the producers are profitable in the long run, 49 percent only achieve low profits or are able to cover their costs. In 2022, the area under vines had fallen below 90,000 hectares for the first time since 1998.
The report predicts that vineyards will reach their lowest point by 2025. In 2022, the area of cleared vineyards was again greater than that of newly planted vineyards. The South African wine industry is facing major challenges, it says: Frequent power cuts affect work in vineyards and cellars; irrigation reservoirs are not well filled due to several dry years; the exchange rate of the South African Rand leads to high investment costs; inefficient port management and little government support are further obstacles to development.
Rico Basson, executive director of the recently established South African Wine trade association, however, also sees an opportunity in the situation: "Although these forecasts herald a difficult time for wine and brandy producers, they also offer opportunities and encourage all producers to take note and plan accordingly. It is time to find long-term trading partners, attract investment, re-evaluate bottled and bulk wine prices and reposition towards premiumisation."
(al / source: vitisphere)