WHILE SA is not seeking a "trade war" with the UK over its retailers importing wine in bulk rather than bottles, it is investigating bulk whisky imports to SA from its largest trading partner.
The UK is citing environmental concerns as it cuts back on imports of bottled wine, and SA is concerned that hundreds of jobs will be lost in the packaging industry as a result.
Stephen Hanival, the Department of Trade and Industry’s chief director for agro-processing, said yesterday UK retailers’ decision posed a "serious risk" to the local wine industry.
Government spokesman Jimmy Manyi said at a briefing yesterday the Cabinet had approved a series of actions to reduce the effect of bulk wine exports. Among nine proposals it had devised was a "study on the impact of possible bulk imports of whisky from the UK".
This could affect companies such as Brandhouse and Pernod Ricard, which own brands such as Johnnie Walker Black Label and Chivas Regal respectively.
Mr Hanival said UK retailers were insisting on bulk wine as it was cheaper. He described the environmental concerns as "quasi", but warned that they could spread to other sectors of SA’s agriculture such as fruit growing.
He said there was a trade imbalance as SA imported R1.7bn in whisky annually, while exporting R997m in wine to the UK. "This is a serious risk to the South African wine industry," Mr Hanival said.
He said the government hoped its new measures would not lead to a trade war, but it had a duty to protect SA’s trade.
Johann Krige, chairman of wine exporters association Wines of SA (Wosa), said yesterday any retaliatory measure such as insisting that bulk whisky imports were bottled in SA would not work.
" This has been going on since the 2008 financial crisis that has caused retailers to squeeze margins. Other wine producing regions such as Australia, New Zealand and California have the same issue," Mr Krige said. Only medium and lower-priced wines were exported in bulk.
According to a Wosa study, for every 120-million litres of wine exported in bulk, about 107 jobs at bottling plants were lost.
With Annaleigh Vallie
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