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In South Africa, wine tourism is an integral part of the wine industry. It is not possible for an industry to survive on production alone and as such there needs to be promotion and investment involved to really make it a success.
According to the CEO of the SA Wine Industry Council, Dr Johan van Rooyen, our local wine industry currently contributes as much as R22-billion to South Africa’s country’s GDP, 25% of which is directly related to wine tourism.
Recently, the French Laroche Group added L’Avenir – a wine-tasting venue near Stellenbosch, Western Cape – to its international wine portfolio, which includes wines from France and Chile. This shows much faith in the local wine industry by foreign investors, and demonstrates that perhaps foreign wine fanatics place more faith in our industry than we as South Africans do. These influential wine investors are optimistic about South African produce, and investments of such a nature show that South Africa is a world-class industry.
With foreign investment comes the transfer of skills and knowledge. International companies and investors have high standards in everything from harvesting and winemaking to packaging and marketing. These internationally-set criterion will force local producers to pay more attention to what they are doing, and increase their all-round efforts, making our local wine industry more efficient overall, and much more competitive globally.
The recent success of many wine investment listings on stock exchanges around the world has proved to investors that wine concerns are legitimate financially, and have the potential for significant growth and earnings.
Australia can be considered a rudimentary model for markets in most wine-producing countries. Similarly, France and Canada are open markets, allowing investors to own shares on exchanges in both these countries. Australia, like many European countries at the moment, is favourable to foreign investors.
Just as tax consequences vary from country to country, so do other investment considerations. There are many attractive investments in the wine industry if you are prepared to do the homework and talk to local producers as well as knowledgeable wine industry people who are in possession of a global perspective. For the most part, investing your money in a foreign wine concern is no different from investing your money in a domestic wine concern – this is according to market experts at least.
If foreign investors are showing such an interest in the South African wine industry, then perhaps we should be too. While one could allot a large amount of money to foreign wine investment, it seems one could just as easily reap generous rewards by keeping the money in South Africa, and backing local producers.
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