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Monday 21 April 2014

Distell to bring low-alc wine to the Cape

26th February, 2013 by Patrick Schmitt

South Africa’s Distell is launching a 5.5% abv wine-based drink in the UK market, which will also become the first low-alcohol label in the Cape.

Harbour 5 redThe new product is called Harbour 5 and comes under Distell’s Two Oceans brand, and comprises a red, white and rosé, all at 5.5% abv.

Explaining the decision to launch the wine in the UK and South Africa, Two Oceans brand manager Jackie Olivier said she believed the demand for low-alcohol wine-based drinks – currently growing at 11% in UK retail – would spread to South Africa too.

“We looked at global trends, and the UK is the biggest market for 5.5%, but we believe it will hit South Africa as well.”

However, Olivier highlighted a major challenge to developing a low-alcohol category in the Cape.

Because the 5.5% label is not legally defined as a wine, but a “wine-based drink”, it cannot be sold in supermarkets, which are not allowed to sell alcoholic drinks other than wine.

“You cannot call it a wine, and grocers can only sell wine in South Africa,” she stated, adding that Harbour 5 will, as a result, be distributed in liquor stores only.

As for the UK, the 5.5% low-alcohol wine category – legally defined as “made wine” – is now worth £38 million from almost 1 million cases sold last year.

With a very low average price of £3.23, the 5.5% sector is being driven by price, with new labels able to meet entry-level on-shelf prices due to a lower duty rate for wine-based drinks at this abv or below in the UK.

Wine-based products at 5.5% or below pay 80p in duty to the UK Treasury, compared to £1.90 for wines at 5.5% and above.

Low-alcohol category leader in the UK is another South Africa wine-based label, Café Collection from First Cape.

Olivier said Harbour 5 would be launched officially in May and had a “secure listing” in the UK.

For the future, she said she wanted to sell the wine in the US, but was struggling to get approval for the label.

Harbour 5 is made by de-alcoholising standard wine to 9% and then adding grape juice concentrate to dilute the abv to 5.5%, as well as add flavour and sweetness, leaving the product with around 36g/l of residual sugar.

The white is made from Chenin Blanc and the red and rosé from Shiraz.

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