South African grape producers have been under financial pressure for some time due to the prevailing drought and other economic challenges. Production costs have doubled in the past decade and costs are expected to rise by 9% in 2018, along with a 17% increase in the minimum wage which takes effect on 1 May.
"With the wine industry supporting approximately 290,000 jobs, the fact that the average wine grape producer does not function at sustainable profit margins and more than a third operate at a loss, is great cause for concern.