Wine shortage to flow from poor harvest

According to Henk Bruwer, chairman of Wine Cellars SA (WCSA) which represents the majority of the local wine cellars, cellars are reporting diminishing grape harvests on a weekly basis - and the harvest season has just reached the halfway mark.

'Certain regions show a harvest decline of up to 25% compared to the previous year. At this stage, the average decline compared to 2003 has been 10%,' says Bruwer. 'This will inevitably lead to a shortage in wine later on in the year.'

"The decline is especially noticeable with white grapes, which represents around 60% of the harvest. This year's disappointing chenin blanc harvest is the worst in a long while, creating serious concern as this is a South African base cultivar on which many cellars and the co-operative sector rely to make large volume wines for the local and export markets. '

According to Bruwer, the decline in the important Breede River region's harvest - currently estimated at 20% less than last year - is particularly worrying as the region remains a vital supplier of quality grapes on a large scale.

'Current indications are that the 2005 wine grape harvest will total around 1 194 646 tonnes according to the SAWIS harvest estimation of 11 February 2005,' says Bruwer. 'That amounts to a decline of 9.3 percent from 2004. It is anticipated that the 2005 harvest of wine, juices and concentrates for non-alcoholic purposes and wine for distillation and other purposes, will amount to 915.1 million liters, calculated against an average yield of 766 liters per ton of grapes. That is 53.7 million liters (5.5%) less than the estimation of 11 January 2005.' 

Bruwer says the industry is particularly concerned about the shortage of good sauvignon blanc and chardonnay grapes, which, together with the chenin blanc situation, will make it extremely difficult for suppliers of wine to supply at competitive prices in their markets.

'The current state of affairs should eradicate the perception that South Africa sits with a massive wine surplus,' says Bruwer. 'As a result of the current poor harvest, cellars will use previous years' stocks to meet market requirements. With stocks expected to decline further, there will be no substantial stock reserves to fall back on - especially with white wine.' 

As of 31 Desember 2005, co-operative and cellar stock levels will decline to a level of 297m liters, compared to 363.7m liters on 31 December 2004.

Bruwer says that consumers will most likely feel the effects of this year's smaller harvest when the white wines reach the market. 

'Local consumers are currently still in a fortunate position. Due to the strong rand, many more local producers placed their wines on the local market, resulting in consumers having access to a variety of wines at low prices. With the decline in stock levels it will be difficult for the industry to maintain these low prices,' according to Bruwer.

Due to a worldwide glut of red wine, prices in this category will stabilize, although it would seem as if more and more consumers worldwide are moving to white wine. 

Bruwer adds that supplies of wine for distillation are good enough to compensate for the increase in brandy consumption in South Africa. 'The brandy market looks healthy with a steady increase of 4% per year in consumption, but careful planning in the past means that the increase in consumption can be accommodated by suppliers. '

According to Johan van Rooyen, Chief Executive of the South African Wine and Brandy Company (SAWB), the dramatic decline in local wine production and the fluctuating stock levels emphasizes the need for a long-term vision and better co-ordination among all role-players in the industry, including producers, retail buyers, smaller dealers and every link in the supply chain. 

'The players in the South African supply chain will have to work together. There has to be better communication about sustainable long-term strategies. Opportunistic short-term behaviour makes it difficult to establish a stable industry. Participative value-chain management becomes one of the best methods to manage sustainable competition and to stabilize the industry,' says Van Rooyen. 

Released by MediaVision for the South African Wine & Brandy Company