An inquiry into factors impacting on the competitiveness of the South African wine industry

Abstract

This article is aiming to provide a comprehensive and understandable statement about the competitiveness of the South African wine industry. A measurement of the competitive performance of the South African wine industry—the WINE COMPETITIVENESS INDEX (WCI)—indicates that South Africa's wines are internationally highly competitive with a sustainable and increasing positive trend over recent years. The wine industry in South Africa also shows positive trends in competitiveness in the long run and it should not lose its competitiveness status in the near future if its dynamic ability to continue to trade is sustained. An analyse of the key success factors that established competitive advantage and constraints that impacted negatively on competitiveness of the wine industry through the—WINE EXECUTIVE SURVEY (WES)—indicates that for the present intense competition in the market, the production of affordable high quality products, stringent regulatory standards in the industry, efficient supporting industries, and the availability of internationally competitive local suppliers of primary inputs are the major success factors to the competitiveness of this industry. The major factors that impact negatively on the competitive success of this industry are the strong Rand, fluctuations in the exchange rate, trust in the political support system, competence of personnel in the public sector, crime, South Africa's labour policy and the growth and size of the local market. These factors should be crafted into a Strategic Plan for the industry.