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Thursday 2 October 2014

UK calms South African bulk wine tensions

15th October, 2012 by Gabriel Stone

South Africa has won a number of concessions during a visit last week from UK business secretary Vince Cable, as the two nations work to avoid a “bulk import war”.

UK business secretary Vince Cable

As reported previously in the drinks business, South Africa had already raised concerns about the decision by major UK retailers to import wine in bulk, claiming that the move had already led to around 700 job losses in its bottling and glass industries.

Although bulk wine shipments have won support from the Waste & Resource Action Programme (WRAP), a UK government funded body which promotes recycling and emission reduction, Cable acknowledged during last week’s visit that it would be “socially irresponsible” to incorporate these types of environmental concerns into UK trade policy.

In a further sign of efforts to defuse tensions, which had led to South Africa threatening to ship Scottish whisky in bulk in a bid to preserve bottling jobs, Cable also conceded: “We need to engage with our supermarkets to ensure that they understand the implications of those commercial decisions.”

South African trade & industry minister Rob Davies noted that the World Trade Organisation had imposed no regulations forcing countries to keep carbon emissions as low as possible when shipping goods, while arguing that a product manufactured in the UK would not necessarily have a lower carbon footprint.

According to figures from industry data provider SAWIS, the percentage of bottled wine volumes out of total exports to the UK, South Africa’s largest export market, slipped from 50% in 2003 to 22% in 2011. Between 2007 and 2011, bulk exports from South Africa to the UK grew on average by 19% each year, compared to a 12% decline in bottled wine.

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