* South Africa does not want “trade war”-trade official
* Its wine industry faces “serious risk”, the official says
* Bulk buying helps retailers save costs
CAPE TOWN, Aug 23 (Reuters) – South Africa is mulling
retaliatory measures to protect its centuries-old wine industry
and counter job losses caused by a British retailers’ move to
buy the product in bulk rather than in bottles, a trade official
said.
British retailers including Tesco and J Sainsbury
are bottling the bulk wine themselves, leading so far
to as many as 700 job losses in South Africa, said Stephen
Hanival, chief director of agro-processing at the Department of
Trade and Industry.
“We certainly hope that the developments on bulk wine don’t
lead to any kind of trade war between either South Africa, the
UK or any of the European Union countries with whom we trade
extensively,” Hanival told reporters late on Wednesday.
“However, South Africa does have a responsibility to protect
its trade interests. Our view is that this is a serious risk to
the South African wine industry,” he said.
The bulk buying helps British retailers save costs and
package the products in ways that may be more appealing for
local customers.
According to the Department of Trade and Industry, last year
South Africa imported 1.7 billion rand ($204 million) of British
whisky. It exported wine valued at 993 million rand to Britain
during the same period, a significant trade imbalance, which
Hanival suggested could be exploited to South Africa’s
advantage.
“Why shouldn’t South Africa be importing bulk whisky from
the UK and bottling it locally, so that we can at least attempt
to prevent some of the job losses that we’ve seen up to now
spreading to other parts of the economy,” he said.
South Africa’s wine industry currently employs around
275,000 workers and has seen exports grow more than 200 percent
between 1998 and 2010, with the major markets including Britain
and other countries in the European Union.
