Govt pledges to back SA wines in global market access

Articles: Govt pledges to back SA wines in global market access

Posted by admin on Tuesday, April 04, 2006 - 10:44 PM

GOVERNMENT will aid the local wine industry in its efforts to improve its international competitiveness through negotiations to further open global markets in an environment characterised largely by unfair trading, Agriculture Minister Thoko Didiza said today.
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The wine industry, whose expansion has been driven largely by exports in recent years, has faced a challenge due partly to the continuing strength of the rand. The country’s packaged wine exports declined by 1,5% by volume last year under the pressure of the exchange rate, combined with a global oversupply of wine. Speaking at the opening of the three-day Cape Wine 2006 wine industry conference and trade exhibition in Cape Town, Didiza said the industry faced a number of "non-insurmountable" challenges regarding its global competitiveness and long-term sustainability, not least of which was market access. She said many competitor wine-producing countries supported their own domestic industries through subsidies, which made it "not so possible" for a level playing field. This issue would be addressed through World Trade Organisation (WTO) negotiations, as the current Doha round had to have a "developmental" outcome that would put developing countries in good stead to achieve their objectives. At the same time, Didiza said tariff levels on imported wines were "pretty high", while in certain cases non-tariff barriers including phyto- sanitary measures and layers of country-specific standards (on top of international standards) also acted as barriers to entry to lucrative markets. "I want to assure you we will continue to focus our efforts to achieve better market access to position the South African industry to trade in a more fair way." She expressed "disappointment" in the outcome of last week’s trade meeting in Rio de Janeiro between the EU, US and representatives of developing nations including India, Brazil and SA, saying it "had not come up with the best results all would have liked". Turning to the local market, the minister said the industry’s strategy for long-term growth had to encourage growth of consumption amongst emerging consumers as well. The success of last year’s ground-breaking Soweto Wine Festival had showed the potential for expansion into new areas, particularly black ones where wine had previously not been popular, she noted. "We hope the industry continues with these initiatives to continue to build the local market. Education and training at a national level is also important to capture the attention of the growing middle class. Especially with the strength of the rand it is important to build the local market." Didiza also confirmed the government’s support for the proposed new wine industry forum to lead transformation, black economic empowerment and growth in the sector. Over the past several months the South African Wine Industry Trust (SAWIT), headed by Chairman Gavin Pieterse, has led a restructuring of the current body - the SA Wine and Brandy Company (SAWB) - to make it more representative and function more smoothly. The minister described as "well considered" the industry’s efforts on the draft Wine Industry BEE Charter. "We look forward to the final product once the consultation process has been concluded," she told conference participants. According to Pieterse, who is also chairman of the Wine Industry BEE Charter Steering Committee, the draft charter sets out targets and a scorecard for industry transformation taking into consideration the inclusion of good governance, the broad-based nature of empowerment and its role in the overall growth of the industry, among other values. Pieterse told the audience the BEE scorecard for the industry provides for points out of a total of 100 in four broad categories, comprising: ownership and management control with a weighting of 35 points; employment equity and skills development with 30 points; preferential procurement with 20 points and rural development and poverty alleviation with 15 points.

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