That banging you can hear in Pretoria is not the Police attacking striking SA Defense Force soldiers but bureaucrats hammering the final nails into the coffin of SA wine exports. News that SA will fail to conclude a new free-trade agreement with the EU by the end of the year could see the imposition of “EU tariffs of between 8,5% and 24%” on SA wine imports according to Business Day.
With European exports already in trouble from a strong rand, economic stagnation in Europe and an overly EU-centric export focus from marketers who love the flesh pots of Piccadilly, the threat of increased import tariffs is a disaster.
But perhaps bureaucratic bungling will finally spur exporters to follow the example of Cobus Joubert who has turned the direction of his Maison Joubert exports 90 degrees to the east with Hong Kong and China his #1 and #2 export markets. As Château Mouton becomes increasingly Parkerized to accommodate the palate of Robert Parker, the classic austerity of cuvées such as Morgenster, Rustenberg and Kanonkop are finding increasing resonance with Asian billionaires.
Wosa does not care so long as duty on books does not increase. Who cares about wine when you can sell braai books!
Input from Wosa, received this morning:
There has been some media conjecture that South African wine prices in the UK may go up next year should there be a lapse in a preferential trade agreement with the European Union. The Trade Development and Cooperation Agreement (TDCA), signed in May of 2004, inter alia, allows South Africa a rebate on 55 million litres of exported wine to EU countries. Scheduled for renewal by December 31, 2010, the agreement has not as yet been renegotiated. However, the director of the SA Liquor Brandowners Association (SALBA), Riaan Kruger has confirmed negotiations between all parties will continue after the set deadline and that existing terms will remain in force until the new agreement has been finalised.
He has explained that while provision was made for the agreement’s revision within five years of its coming into operation, the actual duration of the terms had been unspecified. “The agreement has, in fact been in operation for over six years and nothing will change until new parameters have been established and confirmed by the negotiating parties.”
I also want to take this opportunity of drawing your attention to a new report on South African wine exports, compiled by WOSA’s UK market manager Jo Wehring. It provides the context in which export volumes to the UK have fallen and points to some encouraging developments.