Thanks to WOSA award-winning CEO Su Birch for lifting the veil on how the quango spends its R35 million annual honey-pot to market SA wine overseas. There has clearly been a radical change of direction, with the spend in the unfortunate UK market, still SA’s largest export destination, down a massive 36% for 2012.
The USA is now by far the largest investment at well over four times the amount spent in the Far East and over 14 times the amount allocated to the entire African continent, a market being developed most successfully by Distell, some of the savviest marketers in the business. The USA bill is exceeded only by salaries (up 12% or double the official rate of inflation and the largest budget item) closely followed by the lavish cost of Cape Wine 2012.
A 2011 budget overspend of two and a half million rand is a worry. In the year of a Charles Dickens bi-centenary, it is worth remembering the advice of Mr. Micawber: “annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” Quite how salaries can be increased 12% while levies only go up 5% is the kind of wishful economic thinking that has derailed far more dynamic companies than WOSA.
The trebling of payments to WIETA, the controversial ethical trade initiative, to R1.5 million, also raises eyebrows. Exactly what the industry gets for this money is sure to be raised at an AGM by one of the many ignorant farmers identified by Su. If it is not held during a board meeting, as has been the case in the past, flagrantly flouting the King III code of corporate governance.
Probably a wise decision to cut spending on the UK given the current state of economy there.
Hmm… R1.5M for ethical trade – that should buy off a few people to make sure SA wines gets the kind of exposure it needs *grin*