Uncorking potential: Why SA’s wine exports trail global rivals

South Africa is frequently described as having a natural competitive advantage in wine production.

The Western Cape’s climate and soils, a long-established industry and a strong global reputation for quality should make wine a flagship export sector. Yet recent experience in key overseas markets suggests that this potential remains underachieved.

Over the past few years, travelling in the United Kingdom, I was struck by how difficult it was to find good-quality South African wine in restaurants and at major retailers such as Sainsbury’s.

Where South African wine was available, it was often with unfamiliar labels, presumably bottled and labelled offshore using South African bulk wine. In contrast, shelves were dominated by wines from France, Italy and the United States, alongside strong offerings from smaller countries such as New Zealand, Chile and Argentina.

This raises an uncomfortable question: why has South Africa’s wine industry struggled to translate its natural advantages into sustained export growth, visibility and pricing power?

This would provide a positive knock-on to GDP and employment growth – key requirements of the South African economy.

An industry that should work

On paper, wine production is well suited to South Africa’s development needs. It adds value to an agricultural input, supports tourism, packaging and logistics, and creates significant employment in rural areas. It should be a natural contributor to export-led growth.

According to the South African Wine Industry Information and Systems (Sawis) export report for 2024, South Africa exported around 306 million litres of wine in 2024, valued at $562-million, a small increase from the prior year despite flat volumes. About three-quarters of export value, but only 40% of volume, came from packaged wine, with the balance sold in bulk.

The higher focus on bulk wine exports is apparently due to the high costs of bottling and transport.

Wine exports accounted for roughly 0.5% of total South African exports. The United Kingdom remained the dominant market in 2024, according to Sawis, representing about 25% of export value, although exports to the UK declined year on year. According to Sawis, in 2024, about 60% of wine produced was consumed locally.

SA Wine, in an article published in February 2024, South Africa’s Wine and Brandy Industry – a Pillar of Economic Resilience and Growth Potential, referred to a macro-economic report produced by FTI Consulting. This indicated that the industry supports an estimated 270,000 jobs directly and indirectly, with a high employment multiplier, especially in the Western Cape. Many of these jobs, however, are low-skilled and seasonal. The industry is particularly vulnerable to rising costs, climate change and declining margins.

Structural constraints

Despite its potential, the wine industry faces a set of entrenched constraints.

Many of these have been identified in an article by Rodney Naude in September 2019 in the Journal of Transport and Supply Management.

Internally, producers cite rising input costs, especially labour; escalating packaging costs; skills shortages; limited uptake of productivity-enhancing technologies; and a gradual decline in vineyard hectares as profitability comes under pressure.

Critically, poor logistics performance and port inefficiencies have increased transport costs and reduced reliability for exporters, while the cost of bottling is also a major issue.

Externally, South African wine faces intense global competition, shifting consumer preferences in mature markets such as the United States and Western Europe, exposure to tariffs and increasing climate-related risks. Perhaps most damaging is weak international branding. South African wine is often positioned as “good value” rather than premium, limiting pricing power and reinforcing reliance on bulk exports.

A comparison worth noting

New Zealand provides a useful counterpoint. With a small domestic market and fewer natural scale advantages, it has built a globally recognisable wine brand through focused varietal positioning, consistent quality and coordinated marketing.

As a result, it achieves strong export growth and premium pricing in key markets. It has grown in emerging markets like China and has a favourable tariff agreement.

The coordinating body for its strategy is New Zealand Winegrowers Inc, which is focused on growing the industry. Its focus is on developing the industry, with New Zealand wine being recognised worldwide for its exceptional quality.

Its 2025 annual report indicates that the industry exports were $2.1-billion in 2024, significantly higher than that of South Africa.

South Africa produces a wider range of wines, but lacks a similarly coherent global narrative. What would unlock growth?

If the wine industry is to become a meaningful contributor to growth and employment, several interventions deserve attention.

Improving port efficiency and logistics reliability would immediately enhance competitiveness. Greater use of technology, from precision agriculture to supply-chain management, could lift productivity and resilience. Innovative packaging solutions could reduce costs and improve sustainability outcomes.

Investment in skills development, particularly in viticulture, export marketing and brand building, is essential. There may also be a case for targeted tax or investment incentives to encourage vineyard renewal and value-added production.

Finally, a more focused export and branding strategy, particularly in high-growth markets such as China, South Korea and the rest of Africa, could reduce dependence on mature European markets.

Missed opportunity

South Africa’s wine industry has all the ingredients of a globally competitive export sector. What it lacks is an enabling environment and a clear strategic focus.

Without addressing logistics, costs and branding, the industry risks remaining trapped as a low-margin bulk exporter. With coordinated action from the industry and government, wine could still play a meaningful role in export growth, employment and thus economic growth. DM

Grant Pote is an experienced South African financial services executive and qualified actuary, now retired, with an interest in the drivers of growth and increased employment in the South African economy. The views expressed are his own.