1. How does the macro environment of SA wine industry look like?

2. What changes do u expect in industry over 3-5 years

3. Identify the success factors that might shape SA wine industry

Ans 1. Macro environment of SA wine industry.

Political – The South African government passed the KWV (Ko-operative Wijnbouwers
Vereniging) act in 1924, giving the “cooperative” certain administrative responsibilities and
established it as the sole importer and exporter of “surplus alcohol”. These regulations, combined
with anti-apartheid trade regulations, pushed the wine industry into decline. F.W. deKlerk
disbanded the African National Congress two years early, and the ban on anti-apartheid political
parties was lifted, which resulted in world markets being reopened to exports from South Africa.
Infestation and the First Boer war in 1880, briefly halted wine production. Due to war with
France, British import duties favored exports from exports from the region, which resulted in the
surge of business coming to the Cape wine lands. By 1825, the industry began a steady decline
and as a result of increasing British tariffs and the Second Boer war (1889-1902), the cape wine
industry productivity slowed.

Economic – Because of political changes, the wine industry reaped benefits of a free market, and
exports increased, cause in an upsurge in wine industry production and growth. Economy did
better under President Mandela’s economic policies (KWV stripped of regulatory power).
Biggest exporters were China and Africa. Social – With the ending of Apartheid in south Africa,
a lot of the racial violence had ended and the country was lifted of international sanctions.
Increasing urbanization trend benefited wine. The Cape wine lands were hotspot for tourists who
want to explore beauty and serenity for region.

Social – With the ending of Apartheid in south Africa, a lot of the racial violence had ended and
the country was lifted of international sanctions. Increasing urbanization trend benefited wine
industry because urban consumers were more likely to embrace the culture of drinking wine as
their choice beverage. Increased domestic consumption
Technological – Since SA is a third world country, it has rife poverty and domestic problems.
This affects its industry. There are electrical supply problems. The State-run power company
ESKOM was building three new generating plants but had encountered delays.

Environmental – Cape Town’s climate, soil and slope provided the perfect environment for
grapes to grow. South Africa experienced environmental problems because of climate change
and resource scarcity. Global temperatures were expected to rise 2 degrees and the potential for
drought increased. This caused a drought that became the worst drought experienced by SA in
30years, resulting in reduced yield for grapes. In years prior to 2016, approximately 40 percent
of vineyards were replanted to keep up with industry trends.
Legal – Old apartheid policies damaged the country economically and socially. New anti-
apartheid policies made the economy better in SA. A free market was introduced and capitalist
joined the industry which made many of vineyards all around cape town.