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HCI - Hosken Consolidated Investments Limited : WEAK RAND COULD MEAN GREAT VALUE SOUTH AFRICAN WINES

04/18/2013 | 02:40am US/Eastern

A leading producer believes favourable currency rates mean South African wines can now beat the likes of Australia in offering "exceptional value for money" at all price points.

While sterling is weak against the euro, the US dollar and the Australian dollar, it is showing continuing strength against the South African rand.

KWV chief winemaker Richard Rowe told OLN: "Recognised Australian brands are saying they are not going to continue in the UK market. They have a problem with the strength of the dollar, but that's not an issue with the rand.

"The position of the rand at the moment is particularly favourable for us to move into the UK."

Rowe believes KWV, one of South Africa's largest producers, struggled under the agency of Thierry's because "we gave them too much latitude".

He added: "There wasn't appropriate focus and we were selling entry level products at a price that wasn't sustainable."

But KWV has now appointed Myliko as its UK distributor and is set for a large-scale push in Britain, starting at the London International Wine Fair.

Rowe said: "With a new partnership there is new energy and new focus and we are looking to rebuild our market position.

"We want to present wines of exceptional value for money at entry level and to be selling products above £20."

He warned of the dangers of South Africa being pigeonholed as a producer of entry-level wine and stressed he wants KWV to have a "balanced pyramid".

It offers entry-level wines, the £7.99 KWV Classic range, the £9.99 Rooderberg range, the £19.99 Mentors range and wines all the way up to the £75 Perold label.

"It's a surprise to me that South African producers have pulled out of the UK saying it's too competitive," he said. "It's about getting your offering right."

Source: Offlicence News - Martin Green

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