Fine wines/champagne and spirits saw a strong double-digit current value decline in 2020, and an even stronger retail volume decline, after seeing solid increases during the previous years of the forecast period. A national ban on the trading of alcohol was put in place by the South African government in the first half of the year due to COVID-19.
Although local trade of alcohol was banned by the South African government, and imports were disrupted, the export trade of alcohol continued. The singular movement of products out of the country continued, such as South African fine wines, as South Africa is amongst the top global wine producers.
South Africa has a strong alcoholic drinks market, and within the luxury segment a steady and respected fine wines/champagne market, with champagne in particular seeing a strong rise in popularity before the emergence of COVID-19. The local taste for fine wines/champagnes and spirits continues to grow, along with the acceleration of celebrity endorsements such as that of LVMH ambassadors.
Although fine wines/champagne and spirits is expected to see a better performance in 2021, it will continue to see a strong retail volume decline and a slight current value decline. A ban on sales of alcohol was reimposed in January, which will continue to negatively affect sales.
Three bills have been in draft for many years which would be likely to hamper the consumption and advertising of alcoholic drinks if they pass into law. These are the control of marketing of alcoholic beverages bill, the traffic amendment bill, as well as the liquor amendment bill.
The high-value South African alcoholic drinks industry is driven by a strong drinking culture and significant strong investments from companies such as South African Breweries (SAB) in the market. However, the recent lack of activity in the industry due to the repeated bans on sales of alcoholic drinks to control the spread of COVID-19 and protect the health service left all stakeholders with a vested interest in this category in a difficult position, as sales were much lower.
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This report originates from Passport, our Fine Wines/Champagne and Spirits research and analysis database.
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