It is a week of good news in Cape Town, with the petrol price dropping at midnight tonight, and the Level 5 water restrictions having dropped to Level 3 on Saturday. Continue reading →
The devaluation of the Rand, especially since President Zuma’s Nenegate in December, is not all plain sailing, having negative effects on the wine industry too, warns Wines of South Africa CEO Siobhan Thompson. The weak Rand is expected to dominate for a year.
The positive benefit of the devaluation of the Rand in making the country’s wines more affordable in international markets, will be counteracted by the increased prices of imported corks, barrels, equipment, yeast, and closures. Increased inflation will be likely to drive up wages too, adding to cost increases.
Local wine farmers were advised to hedge their businesses against currency fluctuations, to balance wine exports and local sales, and to increase sales of premium wines.
Ms Thompson warned that the exchange rate devaluation would severly affect international marketing budgets by up to 25-30%, either leading to reduced marketing activity in overseas markets, or a substantial increase in marketing budget will be required. She warned that this could negatively affect building brand ‘South Africa‘ in international markets. She also said: ‘We need to stand true to our strategy of building value over volume. South Africa is serious about growing its image and higher price tier offerings and we need to continue doing so and not be pushed to lower FOBs and price points due to the Rand devaluing’.
Source: The Drinks Business
Chris von Ulmenstein, WhaleTales Blog: www.whalecottage.com/blog Tel 082 55 11 323 Twitter:@WhaleCottage Facebook: click here
The year is coming to a close, and has seen a major change, in that we sold all our guest houses, to create a new beginning Continue reading →
Cape Town has long been the focus of the international film industry, given its majestic beauty, its lower costs due to the weak Rand, being on the same time zone as Europe, and its excellent weather. The Visa Regulations launched last June have put a damper on the Continue reading →
Tourism numbers are reflecting the damaging impact of the new Home Affairs Visa regulations, with Arrivals on the decline, as is the Business Confidence in the Tourism industry. It is no surprise that the two indicators go hand in hand!
The Tourism Business Council of South Africa (TBCSA) Tourism Business Index for the third quarter of this year is 92,4, the second Continue reading →
The GDP is expected to only grow by 1,3% next year, forecasts the IMF, the slowest rate of growth since the last recession in 2009. China’s economic slowdown is largely to blame, with metal imports reducing due to that country’s ‘slump‘. Mining jobs are in Continue reading →
*. Despite the Rand exchange rate being at its best ever for international visitors, no surge in tourism bookings is being seen. The after-effect of last year’s Ebola crisis, and the new visa regulations, have affected tourism numbers from China, India, and Brazil in particular. Hotelier Arthur Gillis said that the golden opportunity of the exchange rate was negated by the visa regulations, and said that we ‘shoot ourselves in the foot’.
*. Wesgro is inviting investors to capitalize on the depreciation of the Rand in investing in the Western Cape, and to buy exported products from the province. Wesgro CEO Tim Harris said that the province’s skilled workforce would offer investors better value for money. Investors would benefit from the lower costs created by the weaker Rand in setting Continue reading →
* The Rand dropped to its lowest level ever yesterday, at R14 to the dollar, mainly in reaction to lower than expected growth forecast for China. The exchange rate will impact on inflation locally, but the oil price was at a 61/2 year low of $40 per barrel yesterday.