Bulk versus bottle dilemma for South African wine

Tue Mar 26, 2013 9:06am EDT
 
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By Tosin Sulaiman

STELLENBOSCH, South Africa (Reuters) - At South Africa's Rostberg and Co., green bottles filled with a ruby liquid clink as they march along a conveyor belt, destined for wine-lovers from Paris to Shanghai.

But if a trend toward bulk shipping continues, the music of the Rostberg bottling plant may be about to stop.

Set in lush vineyards in Stellenbosch, one of South Africa's most famous wine communities, Rostberg has been operating below capacity for the past two years due to a shift to shipping wine in 24,000-litre polypropylene "flexitanks".

The trend has spread through other "New World" wine-producing countries like Chile, Argentina, Australia and New Zealand, which all have distant markets and, in the latter two cases at least, relatively strong currencies that are forcing them to cut costs to stay competitive.

Bottlers in South Africa are frantic about the likely loss of jobs. But another concern for some industry experts and government officials is the potential impact on South Africa's brand: when wine is bottled outside the country, winemakers lose control of a key part of the production process.

These are big concerns for South Africa, where the wine industry plays an outsized role in reshaping the country's image after years under apartheid, which ended in 1994.

"Wine has a tremendously important role to play in the development of Brand South Africa," said Anthony Budd, managing director of Cape Town-based wine exporter Diverse Flavours. "Wine is that much more romantic and seen as premium and coming from a beautiful location."

The number of people working directly or indirectly in South Africa's wine industry has risen to more than 275,000 people from just under 160,000 in 2000, and now represents 1.5 percent of the workforce in an economy dominated by natural resources.   Continued...

 
A worker checks the certification labels on wine bottles on a conveyor belt at the Rostberg bottling plant near Cape Town in this November 29, 2012 file photo. REUTERS/Mike Hutchings/Files