South Africa’s wine industry is irate over British supermarkets’ practice of importing the product in bulk rather than in individual bottles (a step that could jeopardize thousands of South African bottling jobs).
By purchasing wine in bulk, the liquid is moved in tankers to a port, placed in giant containers and transported to Britain -- where local labelers and bottlers place it in individual bottles.
Since 2008, the Guardian reported the percentage of South African wine bottled and packaged domestically has declined from 55 percent to 44 percent.
UK retail giants like Sainsbury and Tesco prefer to buy and move wine in bulk because they can transport higher volumes of the product at a cheaper cost.
However, the Pretoria government complained that 700 bottling jobs have already been lost due to Britain’s growing preference for doing its own packaging.
Stephen Hanival, chief director of agro-processing at South Africa's trade and industry department, told the Guardian: "We certainly hope that the developments on bulk wine don't lead to any kind of trade war between either South Africa, the UK or any of the European Union countries with whom we trade extensively. However, South Africa does have a responsibility to protect its trade interests. Our view is that this is a serious risk to the South African wine industry."
The Wines of South Africa organization, which promotes wine exports, estimates that the local wine industry sheds 107 jobs for every 10 million liters of bulk wine exported.
Hanival further warned that this practice of bulk buying could be extended to other exports like fruits.
South Africa and Britain also have a severe trade imbalance with respect to alcohol – in 2011, South Africa exported wine valued at £75 million to the UK, while importing £129 million of British whisky.
"Why shouldn't South Africa be importing bulk whisky from the UK and bottling it locally, so that we can at least attempt to prevent some of the job losses that we've seen up to now spreading to other parts of the economy?" Hanival asked.
Wine has been cultivated in sunny South Africa for over three hundred years – and according to the Guardian, the 2012 harvest is expected to be one of the largest in history.
The country’s wine exports have jumped by more than 200 percent between 1998 and 2010 – Britain is the top consumer of its packaged wine.
Since 2005, the amount of wine produced by South African wineries has climbed from 628.5 million gross liters to 831.2 million last year, according to WOSA.
South Africa is the world’s seventh largest wine producer.