South Africa’s wine industry is shrinking

"Farmers can make more money with luxury housing projects," says Nosey Pieterse (Black Association for Wine and Spirits Industry).

It’s a sector that needs protection… it employs 100 000 people…

Lester Kiewit, presenter - CapeTalk

South Africa’s wine industry has shrunk by 10% over the past five years, according to Vinpro (a non-profit representing thousands of wine producers).

The country’s wine industry – an employer of 100 000 people - is famous around the world and could be a driver of economic growth and land reform.

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RELATED: 'South Africa has world-class farmers. Agricultural production is booming'

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Lester Kiewit interviewed Nosey Pieterse, President of the Black Association for the Wine and Spirits Industry (BAWSI).

Wine farmers have chosen to shrink their industry, according to Pieterse.

They are rationally choosing to produce other, higher-yielding crops, or turning to the tourism industry as an alternative.

Pieterse says the industry needs protection and blames some countries for circumventing international agreements.

He also says emerging farmers need support to scale very high barriers to entry.

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Over the past five years, according to agricultural economist (Stellenbosch University) Professor Nick Vink:

• The number of wine cellars fell from 566 to 505

• The price of grapes has not increased in real terms in the past decade

• Premium wine producers are bucking the downward trend; tourism plays an important role

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We see new housing projects in agricultural areas… The shrinking of the wine industry is in many instances a choice by the farmers, with these housing projects… and replacing vineyards with other commodities… Farmers can make more money with luxury housing projects…

Nosey Pieterse, President - Black Association for the Wine and Spirits Industry

Agriculture in total needs a lot more protection… other countries are protecting their agriculture, and subsidising… Australia and others have greening projects; an excuse to bypass the agreements that have been made internationally…

Nosey Pieterse, President - Black Association for the Wine and Spirits Industry

If you want real transformation, then the government will have to support emerging farmers. The wine industry is capital intensive… The cost of land alone in areas like Stellenbosch… which black farmer can afford to buy land in those areas? Those areas will remain in white hands forever and ever unless the government radically intervenes.

Nosey Pieterse, President - Black Association for the Wine and Spirits Industry

Listen to the interview in the audio below.

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