Russians thirsty for South African wines

Thursday, 6 June, 2013
The South African wine industry is aiding intra-BRICS trade by increasing exports to Russia.
South African Wine Industry Statistics (Sawis) shows a dramatic increase in sales of South African wine to Russia, from 11,5-million litres in the 2011/2012 financial year to 40,5-million in the 2012/2013 financial year.

This despite challenging trading conditions which include logistical difficulties such as getting wine samples into the country. Danie Kritzinger, CEO of Zidela Wines, will next month ship the first of a three-year, multi-million rand deal to the Eastern European country to be sold in Russian supermarkets.  “We have been working on the deal for more than 18 months,” said the Stellenbosch based wholesaler.

In December, Kritzinger was part of a Wesgro-led Investment and Trade Initiative held in Moscow, where the Western Cape’s official Destination Marketing, Investment and Trade Promotion Agency introduced 15 wine industry players and agricultural producers to Russian retailers and distributors.  A further deal for a Cape Winelands producer resulting from this trade visit is pending.

Zidela’s wine, a chenin blanc and merlot, is bottled locally under the label African Peak. “It is better for the South African wine industry when our wines are bottled here, in the source market, as this is a value add and translates into job creation on our side,” said Wesgro CEO Nils Flaatten.

“The two deals are even more significant when one takes into account that the majority of our wine exports to Russia were of bulk wine, which is bottled in Russia and sold under Russian brand names. It is important that our excellent quality produce from the Western Cape be exported as a known quantity and the Zidela and other such deals are a step in the right direction,” Flaatten said.

The Western Cape’s global export of grape wine was valued at R5,3-billion in 2011 compared to R5,5-billion in 2010. The province’s global wine exports accounted for 10% of total exports in 2011.

Wesgro will return to Russia in September for World Food Moscow and next year for ProdExpo. “SA Tourism is looking to emerging markets to drive tourism growth, which makes Russia a focus area for Wesgro on both the tourism and trade side. A tourist becomes a trader becomes an investor,” Flaatten said.