The World’s Wine Markets

The World’s Wine Markets

Globalization at Work

Edited by Kym Anderson

This absorbing book examines the period of massive structural adjustment taking place in the wine industry. For many centuries wine was very much a European product. While that is still the case today – three-quarters of world wine production, consumption and trade involve Europe and most of the rest involves just a handful of New World countries settled by Europeans – the importance of exports from non-European countries has risen dramatically over the past decade.

Chapter 12: South Africa

Nick Vink, Gavin Williams and Johann Kirsten

Subjects: economics and finance, industrial economics, international economics


Nick Vink, Gavin Williams and Johann Kirsten Until 1997, the marketing of wine, like most sectors of agriculture in South Africa, was extensively regulated by statute. The 1924 Wine and Brandy Control Act pioneered statutory control of agricultural markets. However, whereas most of the 22 marketing schemes introduced under the Marketing Acts of 1937 and 1968 brought markets under state control boards, wine was regulated by the industry’s own institutions. The state also provided few direct subsidies. The industry did benefit, though, from price support and import protection, which enabled it to pass costs on to consumers, and from favourable excise taxes, which favoured the distilling of grapes into spirits at the expense of sugar producers. Like the rest of the agricultural sector of South Africa, the wine industry has been extensively deregulated in two phases over the past 20 years. The origins of the first phase can be found in the shift in monetary policy in the late 1970s and fiscal strategies in the 1980s, which undermined the complex structure of protection, price support and cross-subsidies on which the system of agricultural support was founded. Before 1994, the tax regime was changed, and a start was made to land reform, and to labour legislation and trade policies. The major change was the extensive deregulation of state agricultural marketing schemes within the framework of the Marketing Act of 1968 (Vink and Kassier, 1991; Francis and Williams, 1993; Vink, 1993, 2000; Kirsten and Van Zyl, 1996; Williams et al., 1998). One...

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