Journal article
Strategic challenges facing South African wine cooperatives: upgrading or bulk production?


Publication Details
Author list: Ewert J., Hanf J.H., Schweickert E.
Publication year: 2015
Source: Journal of Wine Research
Volume number: 26
Issue number: 4
Start page: 287
End page: 303
Publisher: Taylor & Francis (Routledge): SSH Titles
ISSN: 0957-1264
DOI: 10.1080/09571264.2015.1092119
Languages: English

Abstract

Emerging from decades of regulation and international isolation in the early 1990s, investment flowed into the South African wine industry, new vineyards were established, co-operatives modernized themselves, process and product ‘upgrading’ took place, wine quality improved, and export volumes increased dramatically, much of it sold in bulk. While this has inevitably stimulated innovation, the financial rewards for ‘basic’ quality are limited. Thus after two decades of upgrading, where do South African wine co-operatives, who produce most of the exports, go from here? Conventional global value chain theory (GVC) suggests that improving quality and adding further value is the way forward. However, given the classical constraints of co-operatives, is the higher quality trajectory a realistic option? Drawing on detailed case studies the paper argues that it is not only remnants of traditional principles that stand in the way of South Africa's ‘new generation’ co-operatives moving up the value chain, but also the high costs involved.