Wine exports are a vital part of the growth and image-building strategy of the South African wine industry. South Africa annually exports R10.5 billion worth of wine to more than 125 countries worldwide with the USA being one of the highest value generating destinations with wine exports to the value of R798 million in 2022.
South Africa’s trade relationship with the USA is extremely important – especially our much-needed continued access to US markets created under the Africa Growth Opportunity Act (AGOA), which comes under the spotlight during the US-Africa Trade and Economic Cooperation Forum from November 2-4 in Johannesburg. South Africa Wine will actively participate in the roundtable and panel discussions.
“Many jobs are created through the import, marketing and selling of South African wine in the USA,” says Rico Basson, South Africa Wine CEO. “Our current trade relationship with the USA also gives the South African wine industry a competitive edge where the tax relief assists in pricing our wine competitively. It also assists with a better ROI which in turn can be invested in vineyards and people – something our industry direly needs.”
Considering that in 2022, South Africa exported about 25.5 million litres of wine into the US at a value of almost R798 million, this could equate to a tax benefit of up to R57 million, assuming all South African wine imports made use of the tax relief.
“While this may seem small along with South Africa’s share of the US market, which is about 1-2%, it is nevertheless an important growing premium market for South African wine and currently ranks as our second biggest value export market for our packaged wine,” says Siobhan Thompson, Wines of South Africa (WoSA) CEO. “If South Africa were to be taken out of this agreement, we would still export our wines to the US, but it could hamper our growth because the wine would land on the shelf at a higher price and there could be some resistance to that from trade and consumers.”
“The South African wine industry cannot afford to lose any market share in the USA,” says Basson. “We not only need the benefits created by the AGOA agreement, but we also need good business relationships between South Africa and the USA as this will positively affect the industry in terms of tourism, continued wine exports and our reputation as credible role-players in the international trade environment. Direct air access to and from the USA brings more visitors to our country and creates more education and exposure to the Cape Winelands. In this way, we build ambassadors who will want to find South African wine in the USA when they return.
“The renewal of the AGOA agreement will benefit the US economy as well. South Africa produces some of the best wines on this planet. Our white, red and Cap Classique offerings are world-class, and we are also embracing a more diverse line-up of grape varieties – all attractive options for the US consumer. The industry needs policy certainty, and we would thus like to urge the timeous renewal of this important agreement before the AGOA agreement expires in 2025,” Basson concluded.
South Africa Wine
Communications and Brand Manager: South Africa Wine
Tel: 021 276 0458