Threat to top SA wines
PREMIUM South African wines are changing hands for prices well below their value, and without caution to ensure these products received their due financial reward, the industry was at serious risk of not remaining sustainable.
This was at the heart of British wine judge, and internationally recognised writer, Tim Atkin’s keynote address at the 42nd annual Nederburg Auction, held in Paarl, this weekend.
“Cheap prices are very damaging to South Africa, which remains marooned close to the bottom of the list of the world’s exporters when it comes to profitability. Only Spain, a country that receives R6 billion in annual subsidies from the EU and its government, has a lower per-litre price at 1.09 (R17) than South Africa’s 1.30,” Atkin said.
It was therefore almost ironic that the auction prices this year achieved an all-time high rand per litre price of R740. Auctioneers Anthony Barne of Bonhams and David Elswood of Christie’s knocked down 10 506 litres of wine with total sales rising 23% over last year’s prices.
That was despite a 4% dip in the volume under the hammer.
“It is a clear endorsement from buyers worldwide, indicating a strong appetite exists for fine, mature South African wines,” auction manager Dalene Steyn said.
The De Wetshof Chardonnay Finesse 1993 led the charge for the whites, achieving a record price of R2 000 per 750ml bottle. The red wines showed a 50% rise in the average price per litre to R961.
The Zonnebloem Shiraz 1976 fetched an unsurpassed R22 000 for three 750ml bottles.
Tsogo Sun was the top buyer, spending more than R1 million, followed by the Spar Group and the Singita group of luxury game lodges.
During the charity auction, the hammer came down on a single bottle of Petrus 1988, signed by Christian Moueix, at R70 000.
Atkin said the South African wine industry contributed R36 billion annually to gross domestic product. It was a major employer and conveyed “an upbeat and positive image” of the Cape and its beautiful winelands.
However, while there has never been so much great South African wine available, it remained “dramatically underpriced” with it being hard to think of another country delivering such spectacular value.
“(These wines) will surely increase in price as South Africa is recognised globally as a source of remarkable and unique wines that combine a sense of heritage with a dynamic, vibrant present,” he said.
Atkin also raised the elephant in the room – profitability. Linked to low prices was the threat to old vines, a dwindling resource he believed should be protected in a country where producers typically replace their vines every 25 years. Old vines yield lower crops of higher quality fruit, but if producers and consumers were unwilling to pay the premium for that fruit, farmers could not afford to keep them in the ground.
Chevallerie owner Christa von la Chevallerie said she must either charge R25 000 a ton for her highly sought-after chenin blanc, or pull up the vines, as below that price she “simply cannot make a living”.
“There is an argument for intervention (on old vine prices). Why doesn’t the industry agree, at the very least, on a minimum price for old vine fruit? How about regular discussions between representatives of the growers, producers and co-operative to discuss a joint strategy to make South African wine profitable and respond to issues such as drought, climate change and pricing?”