www.thewinepost.co.uk Wine Blog

With exchange rates putting the prices of wines up, could South Africa be in a position to really take advantage this year?

The prices of euro-zone wines are sure to go up this year, with importers worrying about the state of the pound, importing into the UK has got expensive, a bottle that costs a retailer ten euros, eighteen months ago would probably have sold somewhere between £10.99 and £11.49, today though with merchants wary of exchange rates that figure is more likely to be £15.49 at todays exchange rates or given that there needs to be an allowance for market fluctuations more like £16.49.

With the dollar holding up against the pound (remember it used to be over $2 to the pound and now sits in the high $1.40s) wines from Chile, California and Argentina are going to cost more too, add into that strong Australian and New Zealand dollars and the outlook for the UK wine drinker isn't very good.

Step up to the mark, South Africa. Yes we don't get as many Rand for our pound as we used to, but it's a healthier situation than it used to be, what is more South Africa has for the last few years tended to offer a very good quality to price ratio. It's a real opportunity for the Cape to show what they can do at every price point from the budget bargain busting supermarket wines to the top end quality wines. You only need to look at the last few Decanter awards (which I don't pay a huge amount of interest in) and see that South Africa has come out very strongly. That isn't to say that everything is good, and I don't really like awards - but the fact that they performed well across the board suggests that they were impressive wines.

If I were marketing South African wines, I think I'd look at this year and say - you know what this is the year to put in a real push and see what we can do. 

I had an e-mail today from The Wine Society promoting their upcoming Rhone En Primeur campaign which because 2007 was such an amazingly good year in the Rhone is very tempting. But there are a number of things holding me back. Firstly Rhone prices don't do the same as Bordeaux prices - they just don't go through the roof in the same way and it may be possible to pick the same wines up at a later date for a similar amount of money. Secondly the exchange rate is so lousy I suspect that merchants - who will pay in Euros, are going to be paying a lot more pounds for the wine than they would otherwise have done, and because of the nature of the vintage (yet another vintage of the century from France!) it is likely that prices will be high anyway. What I wonder is firstly that because the Rhone doesn't usually show much financial gain (well not at the level I can buy anyway) whether this being a stellar year might. I also  wonder whether ,if the exchange rates ever sort themselves out, the prices may in fact come down (it is of course possible that the prices that merchants end up paying means that the amount they charge en primeur isn't their cheapest price - it all depends on the eschange rate on theday they pay their invoice. It is also possible that in 3, 4 or 5 years I could pop across to Calais and pick the same wines up much cheaper from a reasonable outlet in Northern France.

On the other hand demand for these wines might be very high - they might dissapear from the open market and they may go up in price. Quite often you can have a decent stab at guessing which way it's going to fall but on this occasion I just can't pick it. Then of course you have to add in the factor that my pride and joy was born in 2007 so I may want to get some bottles to open to celebrate her birthday with from time to time over the coming years.