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Global oversupply bites deeper
The problem of global oversupply and the accompanying fierce price competition in key markets is having an ever-greater impact on profitability around the globe. With Australia and parts of France already deep into a wine downturn, it increasingly appears that South Africa and Chilean producers are also suffering serious economic problems. Just last week, the South African Wine & Brandy Company (SAWBC) met with a government agricultural committee to ask for increased support to ‘regain a competitive advantage’ and warned that it was becoming ‘virtually impossible’ for South Africa to compete profitably on price in its two key markets, Germany and the UK. As well as an oversupply of wine driving a discount culture in supermarkets, the continued strength of the rand has meant margins were low. ...
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