Not what you thought

Robert Joseph considers the export competition between South Africa's raisins, grapes and wine - and the surprisingly low average price of wine in the UK.

Iceberg by Huw Edwards on Unsplash
Iceberg by Huw Edwards on Unsplash

Of all the world’s visual metaphors, none beats the iceberg.

I was reminded of this when I noticed a chart by the American Association of Wine Economists, using data from Comtrade that showed South Africa’s exports of fresh and dried grapes to be worth fractionally more than the wine it sells. The  former amount to $647m compared to the latter’s $623m.

While applauding the dynamism of the farmers in the Cape who focus on growing fruit for eating rather than drinking, many observers will be surprised at these statistics. Surely the brilliant new wave of South African wines deservedly championed internationally by critics like Tim Atkin MW in his annual reports must be much more valuable than stuff that’s bought by the kilo for use in fruitcakes.

And of course those wines are, but they need to be set alongside the figures I have from the leading bulk wine broker, Ciatti, that reveal that, at the current exchange rate of the rand against the US dollar, South African ‘generic red’ is available for 56 cents a litre, while the white costs a mere 37c. Chardonnay, Sauvignon, Merlot and Cabernet Sauvignon are all as cheap as 74c, while Chenin is 48c and Colombard and generic rosé are a mere 41c.

If, like four million households in France in 2019, you buy a fruit-flavoured wine, or if you pick up a popular Echo Falls Sumer Berries ‘Alcoholic Mixed Beverage’ in the UK, or a bottle of Sangria in Germany, there’s a fair chance that Cape grapes were involved.

Above average?

On the same day that I saw the South African wine chart, I noticed a British independent specialist wine retailer questioning the six pound price tag that is generally quoted as an average for wine sold in the UK off-trade. Shops like his sell little or no wine at this price, so how does it make any sense?

Again, one has to look at where British wine drinkers are doing their shopping and what they are buying. There are only around 900 independent specialists in the UK and nearly four bottles in every five is bought from a supermarket. Even if the shelves of those stores are well stocked with bottles with price tags of £8 or £9, a glance into the trolleys as they head for the checkouts will reveal the number of bottles costing £5 or less. At Lidl, £4.49 will get you a Chianti with a Bronze from the IWSC or an AOC Bordeaux. Pay a pound more, and you get a Bordeaux Superieur, and a Bronze from the same competition without even nudging that £6 average.

The Cape bulk wines and UK supermarket wines are merely more examples of the confirmation bias I wrote about in a recent piece. Few readers of this offering probably spend much time watching what people buy in supermarkets, let alone drinking fruit-flavoured wine or £3.99 Bordeaux. Why do they even need to know about such things?

Robert Joseph

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