African wines miss Chinese
market By John Fraser
JOHANNESBURG - South Africa and China are
partners within a club of leading emerging
markets, and it would seem natural that exports of
South African wine to the Chinese market should be
surging. However, there is a feeling within the
wine industry that not enough of the right support
is being made available by the authorities.
Governments have made the political move
to form the Brazil, Russia, India, China and South
Africa (BRICS) alliance, but it could be argued
that they should also be working just as hard to
ensure that trade grows alongside political
"South Africa's BRICS
positioning should be an immediate and
massive boost to the wine
industry - but it isn't even felt as far as I can
see," said Mike Ratcliffe, owner of the Warwick
wine estate in Stellenbosch, in the heart of the
"An optimist might point
out that there has been an increase in the number
of liters of wine sold to China, but this would be
misleading, as there is very little in the way of
solid branded product with a reasonable
expectation of sustainable growth. The majority of
South African wines are priced at the cheap end of
the pricing spectrum - giving rise to a risk of
low-end perception formation, and doing damage to
South Africa's quality reputation," he told IPS.
Ratcliffe was dismissive of the activities
by South Africa's Department of Trade and Industry
(DTI) in boosting wine exports to China, and he
argued that instead all efforts should be focused
through the industry export body: Wines of South
Africa (WOSA). "DTI-sponsored trips to the
Chinese market are poorly planned, poorly
received, often mocked by Chinese importers, and
are what I would consider an irrational use of
state funds," he said. "The DTI should be
providing these funds to WOSA, who are
professionally involved in specifically promoting
the wine industry and would be able to ensure that
the funds are effectively and efficiently
Cape Town-based TV chef and
wine consultant Michael Olivier told IPS that
there must be a more coordinated effort among all
the South African role players for better sales of
South African wine in China.
"I would hope
that BRICS would assist, but it takes consistent
marketing to break through," he said. "I think the
industry has the clout, separately rather than
collectively. WOSA needs to put their oar in too."
Ratcliffe is worried that the industry has
yet to open a Chinese office, appoint a Chinese
representative or commence any kind of effective
media or marketing campaign in China.
"This ridiculous and laughable state of
affairs is not entirely due to a lack of political
will, but mainly due to a lack of funding. Generic
export marketing funds should be forthcoming from
Provincial and National coffers to support a
Johannesburg-based branding consultant and
wine writer Jeremy Sampson agreed that the South
African government's support for the wine industry
is not enough, and is not in evidence. "Apparently
they are busy, but where is the evidence?" he
Sampson told IPS that there must be
more imagination in promoting exports. He pointed
to the growth in auctions of premium wine in Hong
Kong, saying this is one platform which should be
Ratcliffe said exports to
China can and must be boosted. "For South Africa
to be a recognized as a world-class wine producing
nation, we have to have international exposure.
South African wine has the ability to be an
effective national marketing tool which is
positioned on the top wine lists of the world and
on every supermarket shelf in the world. What
better way to get a little piece of tangible South
Africa to the world effectively and cheaply."
Ratcliffe believes the rewards could be
massive, as China has virtually unlimited
potential as a market for wine.
enormous, interest in SA wine is untainted by
historical perceptions, and quality is revered,"
he said. "South Africa has a unique opportunity to
cash in on this demand and it would not take a
massive stretch to achieve this."
he said that South African wines have failed to
make significant inroads into the United States
"and we must be wary of missing and wasting the
Chinese opportunity. Unless something changes, we
will allow all of our competitors to bypass us in
This view was shared by Sampson.
"The Chinese market is huge, and everyone else is
there already," he said.
arises because there are hundreds of different
South African wine producers and brands, but
Ratcliffe argued that this is not unique to his
country and should not be a barrier to success.
"There are only a handful of South African
winery operations that are sufficiently organized
and sufficiently scalable to take advantage of the
Chinese opportunity," he said. "It should be these
companies who enter China and create a beachhead
that the rest of the industry can use as a
South African wines do not
benefit from the advantageous import duties that
many of the country's competitors have negotiated
through their free-trade agreements with Beijing,
with Ratcliffe noting that, for instance,
Australian wine exporters pay far lower duties
than those from South Africa.
difference in import duties paid by South African
wine compared to Australian wines is shocking and
embarrassing," he said.