As the African Growth and Opportunities Act (Agoa) kicked off in Johannesburg this week, the wine industry said they need the market presented by Agoa.
Industry leaders expressed that the country needed a strong and viable market that will ensure continuous job creation and growth of the wine industry in South Africa, with the United States of America (USA) being the ideal market to ensure that happens.
‘The US market key is for us’
Rico Basson, South Africa Wine’s chief executive, said the country exports R10.5 billion worth of wine to more than 125 countries, with the USA being one of the biggest value-generating destinations.
Basson said the country’s trade relations with the USA were extremely important and needed to be nurtured.
“Many jobs are created through the import, marketing and selling of South African wine in the USA,” said Basson.
“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 return on investment which in turn can be invested in vineyards and people, something our industry direly needs,” he said.
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The numbers say it all
According to Basson, in 2022 South Africa exported about 25.5 million litres of wine into the USA at a value of almost R798 million.
“The renewal of the Agoa agreement will benefit the USA 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 USA consumer,” he said.
Reassurance needed
Basson said the industry needed policy certainty and the renewal of the agreement between South Africa and the USA before the Agoa agreement expires in 2025.
“The South African wine industry cannot afford to lose any market share in the USA. We don’t 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 and direct air access to and from the USA brings more visitors to our country and creates more education and exposure to the Cape Winelands,” he said.
Stakes are high
Wines of South Africa (WoSA) chief executive Siobhan Thompson said should South Africa be taken out of the Agoa agreement, the exported wines will reach the USA but at a higher price.
“While this may seem small along with South Africa’s share of the USA 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,” Thompson said.
The purpose of the Agoa forum is to discuss ways of expanding trade and investment relations between the USA and sub-Saharan Africa, and the implementation of Agoa includes encouraging joint ventures between small and large businesses.
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