Growing Russian demand for South African wines open opportunities for local producers
The increase in the demand for the South African wines in Russia provides a good opportunity for the local companies to penetrate the Russian market.
This, according to Managing Director of the Stellenbosch wine company, Thandi Wines, Mr Vernon Henn. He is one of the 20 businesspeople set to Russia to participate in the Investment and Trade Initiative (ITI) to Novosibirsk.
The mission is organized and funded by the Department of Trade and Industry (the dti) with the aim increasing the volume of exports of agro-processing and clothing and textile products, as well as built environment and capital equipment goods and services to the Russian market. Eight of the companies participating in the mission are wine producers from the Western Cape.
“The Russian market for the SA wines is growing remarkably fast. There is big demand for our wines in Russia as a result of the European Union’s economic sanctions against that country. The Russians were importing most of their wines from European countries such as France, Italy and Spain. Now that the Russians have been exposed to the SA wine they are increasingly falling in love with its taste and quality. This has resulted in an increase in exports of both bulk and bottled SA wines to Russia,” says Henn.
Two weeks ago the Deputy Minister of Trade and Industry, Mr Bulelani Magwanishe told a gathering of the Western Cape wine producers and a Russian wine buyer that compared to 2015, SA’s wine exports to Russia increased by 58% in 2016, amounting to a total of R273 million.
Henn adds that the Russian economy has shown positive signs of improvement which will lead to an increase in the consumption of wine and is hopeful that the SA wines will be high on the consumers’ wine shopping lists.
“The continuous interactions that are taking place between South Africa and Russia within the Brics platform also provide us with a perfect opportunity to make inroads into the Russian market. This is the most opportune time for the SA winemakers to be there and capitalise on these positive developments. We are confident that we will benefit from participating in the ITI,” says Henn.
He acknowledges that the international exhibitions and missions that the dti funded him to participate in have impacted positively on his company. The company’s products are already exported to Europe and Asia as a result of the assistance from the department.
“We are a small but internationally-focused company with limited budget, but 95% of our business is generated through international sales. We would not have been able to penetrate these exports markets without the assistance of the dti. About 50-60% of our export business is coming from the dti-funded international exhibitions and trade missions,” says Henn.