South African wines growing at premium price points

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South African wines are growing at more premium price points - those over £5 have grown 25% in last 12 months while the £7+ market has has grown 34%.

 

Although duty and inflationary increases have pushed prices upwards overall in the wine category, South Africa has outperformed the market as a whole.

 

In the £5+ sector total market growth was 23%, while South Africa’s performance was even more impressive at over £7. It grew by 34% versus the market average of 24%, according to Nielsen MAT figures to June 30, 2012.

 

South Africa’s average price has also grown in line with the market, increasing by 5% over the same period, while market share has remained static.

 

But sales of South African wines are still falling at lower prices, most notably below £3, where sales have fallen 54% over the past year. However the total decline has slowed dramatically. With exports to the UK up 16% from January to July 2012, figures indicate that the category will be back in positive growth by the close of the year.

 

Jo Wehring, UK market manager for Wines of South Africa, said: “These figures clearly indicate that South Africa is becoming better known for its quality wines in the UK. South Africa is well placed to produce exciting, premium wines that still deliver excellent value.

 

“Duty increases, inflation and rising costs mean that a price point below £3 is unsustainable for the vast majority of producers. It has also had some impact on the rise in average price but South Africa is out-performing the market, even more so at the premium prices, indicating that interest in South Africa’s top wines is increasing. We are seeing great support for South Africa from the independent merchants, which is helping to lift the image of the wines.”

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