Wine industry struggles to remain sustainable

Dark clouds hovering over the wine industry pose threat to job creation, rural development and economic growth

- Glenneis Kriel.

The wine and brandy industry is a cornerstone of South Africa’s economic landscape. In 2022, the industry contributed R56,5 billion to gross domestic product (GDP), R19 billion to the fiscal and created 270 364 jobs across the country. This is according to the Macro-Economic Impact report recently released in Stellenbosch by FTI Consulting.

The report, which measured the wine and brandy industry’s impact on the South African economy in 2022, reveals that the industry’s output-based GDP multipliers of 1,57 surpassed the national average of 1,30, meaning that R1,57 million of value was added to the national economy for each R1 million of sales revenue in the industry. The study also found that for every R1 million of output in the wine industry, an additional R2,12 million of output was generated in the rest of the economy.

The industry’s output-based employment multiplier of 7,51 also surpasses the South African average of 6,58, indicating that the industry supported 7,51 formal and informal jobs for every R1 million of sales revenue. The employment-to-employment multiplier of 3,15 indicates that an additional 2,15 jobs are supported throughout the economy for every job in the wine industry.

WINE TOURISM

The FTI study was accompanied by a 2022 study by I and M Futureneer Advisors that measured the economic contribution of wine tourism. The study underscored the important role of wine tourism as source of revenue, by revealing that total winery turnover attributed to wine tourism increased from 14,7% in 2019, when the study was last done, to 17,3% in 2022.