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SA Wine Price Problematic in Netherlands

August 30, 2009
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The international pricing of South African wine is a problem that many South African wine producers face. The UK is often held up as the example of where South African wines are trapped in too low a price brand, damaging not only margins but also perception of South African wine.

However, the UK is not the only place where this problem exists. Neil Pendock interviewed Marita de Beer from Dutch wine importer Great Grapes for the Sunday Times. She had this to say:

“In the past 15-odd years, SA market share in supermarket and wine-liquor retail chains has grown from practically 0 to 19%. We’re up 6% on 2007 versus 2% for all countries in the same period.

“The worrying thing is that SA’s growth continues to be at lower-than-average prices — €2.62 versus €2.84 per 0.75 litres bottle. We are still being beaten by the Aussies, who despite a much lower market share (4.8%) are trading at €3.63 per bottle and whose prices have risen by 3% versus only 1% for SA.

“SA’s price quality, its biggest raison d’être in the past, is fast becoming negligible when compared with its competitors. We urgently need to get out of the bulk-for-house-wine business, build brands and focus on higher, more profitable price points.”

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