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“AMERICAN WINE DELEGATION CONTRIBUTES TO IMPROVED U.S.-SOUTH AFRICAN BUSINESS RELATIONS” mentioning the U.S. Dept of Agriculture was published in the Extensions of Remarks section on pages E595-E596 on April 21, 1998.
The publication is reproduced in full below:
AMERICAN WINE DELEGATION CONTRIBUTES TO IMPROVED U.S.-SOUTH AFRICAN
BUSINESS RELATIONS
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HON. GEORGE P. RADANOVICH
of california
in the house of representatives
Tuesday, April 21, 1998
Mr. RADANOVICH. Mr. Speaker, fellow members of the House and Senate, and colleagues in the U.S. wine industry, last May 20th to 30th, 1997, I had the opportunity to again lend my support to an American Delegation of Viticulture and Enology that spent two weeks visiting and studying all aspects of the Republic of South Africa's wine industry.
In April of 1996, I had the opportunity of providing support and guidance to a similar trip, the first officially invited U.S. wine delegation to visit the People's Republic of China since 1949. A summary of that report, which is still hailed as a primary source of information on the PRC wine industry, was entered into the Congressional Record of September 28, 1996, Vol. 142, No. 137, pp. E1776-E1777.
The trip to South Africa, also organized under the sponsorship of the People to People Citizen Ambassador Program, was conducted for the purposes of establishing contacts at all levels of the South African wine industry, assessing the status and growth of the industry and identifying the potentials for American wine interest involvement, including trade, marketing, investment, and joint venture activities, as well as the problems that may be encountered in pursuing such business interests.
The resulting 72-page delegation report entitled, ``A Window on the Wine Industry of South Africa,'' not only addresses the above points of interest, but provides a current picture of how the South African wine industry is structured and operates.
Descriptions are given of the organization and functions of the various government elements that have oversight responsibilities for the nation's alcohol beverage industry, supporting research institutions, including the University of Stellenbosch's Viticulture and Oenology academic program, and other industry/private sector wine education initiatives. Also, vineyard management and winemaking practices in South Africa are addressed, along with site visit descriptions of the nation's largest wine cooperative, KWV, and several individual wineries from the most northerly positioned wine estate outside of Johannesburg to wine estates of the Cape Town region.
This report, I feel, given the current national attention being focused on U.S.-South African relations, particularly in the field of business and trade, will serve as a valuable up-to-date source of information for anyone in the U.S. wine community who is interested in developing a business relationship with or in South Africa.
I wish to commend the members of this delegation and its leader, Gordon Murchie, President of the Vinifera Wine Growers Association, for their professionalism in representing the United States in this valuable fact-finding and trade relations trip.
It is with considerable pleasure that I offer the Prologue of this report, which not only summarizes the potentials and challenges for American wine industry involvement, but outlines how to proceed and who to contact, both in the United States and South Africa, to establish business and trade relations.
The full report is available by contacting the Vinifera Wine Growers Association.
For further information on making contact with the government or private sector agencies and organizations listed herein, please contact my Washington, D.C. office.
SOUTH AFRICAN WINE INDUSTRY TRADE AND BUSINESS OVERVIEW--PROLOGUE
South Africa is a proud nation with a history that dates back to 1652 when the first European settlement was established by Jan van Riebeeck and his party at the Cape of Good Hope.
It is one of the most developed countries on the continent of Africa. It boasts a highly sophisticated national infrastructure of transportation, communications, social and economic organizations. The water from the public system is potable in the entire country.
But the nation, also, faces some of the most challenging social, labor, political and economic problems of any country. However, as the post apartheid period was achieved without a major civil uprising, the new South Africa is a nation of considerable domestic and international economic promise.
South Africa's wine industry has a 342 year history. It is a developed, technologically sophisticated and fully modern industry. Generally, the level of viticultural and ecological practices and research are equal to any wine producing nation.
With a population of approximately 43 million, a growing consumer base, and a developed product distribution and marketing system, the growth of domestic wine sales should continue to increase, inhibited only by the industry's inability to produce sufficient quantities to meet consumer demand. This is also true of South Africa's potentials of marketing its premium wines on the international market.
Overall, if the South African wine industry can resolve the problems of limited water resources and lack of a dependable, trained, skilled, and affordable work force, there is little reason that South Africa cannot become a major wine exporting nation.
The climate and opportunities for American wine industry joint venture and investment activities, as well as for the exporting of American wines to South Africa, are considerable. However, interested parties should first conduct an economic feasibility study on shipping bottled wines to the South African market. As the consumer base grows in South Africa, the appeal of international products also grows. The possibility of a joint venture arrangement of shipping bulk wine to South Africa for local bottling and marketing at competitive prices would appear most doable.
One of the present drawbacks to doing business with South Africa, particularly as it applies to the alcohol beverage industry, is the complexity and diffusion of the government's bureaucracy that deals with the importation of alcohol beverage products. The number of government and quasi government entities that have jurisdiction or partial jurisdiction over taxes, tariffs, licensing, quality control, authentication of origin, etc., is confusing to say the least.
This is a situation that the South African government and the wine industry are well aware of and are in the process of trying to restructure to be more export-import business friendly.
For the immediate future, however, it would appear that foreign wine interests should consider contacting and working through one of the established commercial agents in South Africa who knows how to work his or her way through the maze of import regulations and necessary paper work.
For more complete information than contained in this report, a starting point for anyone interested in doing business with South Africa would be to contact the U.S. Department of Agriculture, Foreign Agriculture Service, Africa Desk, Washington, D.C. (Paul Hoffman, Africa Area Officer); and for current market information, contact the Department of Agriculture, Foreign Agricultural Service, Trade Assistance and Promotion Office, Washington, D.C.; or contact directly the U.S. Foreign Agricultural Service in Pretoria, South Africa. Additional information can be obtained by contacting the U.S. Department of Commerce, International Trade Administration, South Africa Desk, Washington, D.C., (office Industry Specialist for the Alcohol beverage industry is Donald Hodges); and the U.S. Trade Information Center for current commercial and economic information regarding South Africa.
South Africa is a signatory to the Tokyo Round Agreement on Import Licensing Procedures. Among other products, alcohol beverage products require an import permit which the South African importer or foreign exporter agent obtains from the Directorate of Import and Export Control within the Department of Trade and Industry.
Since the end of the trade embargo in 1994, U.S. companies can freely engage in trade activities with South Africa. But, again, it would be advisable for interested industry parties to check with several of the U.S. and South African industry-related government and private sector entities for advice and up-dated data on current export (e.g., tariff rates and customs valuations) and business regulations and procedures. For example, the Department of Commerce maintains a U.S. and Foreign Commercial Service (U.S. & F.C.S.) office in Johannesburg and a branch office in Cape Town. U.S. companies/individuals interested in doing wine-related business in South Africa may wish to contact these offices directly for further advice, information and recommended contacts: U.S. Foreign and Commercial Service, c/o American Consulate General, Johannesburg, S.A. and U.S. Foreign and Commercial Service, Johannesburg, or Cape Town, American Consulate General, c/o Department of State, Washington, D.C.
Also, there are a number of U.S. and South African business organizations both in Washington, D.C., and in South Africa that are good sources of information and potential business contacts. They include the following: American Chamber of Commerce in Southern Africa; U.S.-South Africa Business Council, Washington, D.C.; and Investor Responsibility Research Center, Inc. (IRRC), Washington, D.C. The IRRC publishes a number of informational materials about American business activities in South Africa.
For information on possible U.S. government assistance in the establishment of joint venture capital development projects, e.g., an American equipped bottling plant, contact the U.S. Trade and Development Agency, Africa Division, Washington, D.C., Mr. John Richter, Director.
For more information on import permits, contact the Director of Imports and Exports, Department of Trade and Industry, South Africa.
For more information on import policy and tariffs, contact the Commissioner, Customs and Excise Administration, Department of Finance, South Africa; South African Import and Export Association; South African Chamber of Business (SACOB); South African Foreign Trade Organization (SAFTO); or Embassy of South Africa, Economic/Commercial Section.
Additionally, if one has an interest in marketing a U.S. wine product in South Africa, there is the benefit of being able to access an in-
country modern public media network and advertising resource. For further information on advertising agencies and advertising programs in South Africa, inquiries should be directed to the Association of Advertising Agencies, Johannesburg, S.A.
Current customs duties payable on importation of wine to the Republic of South Africa: Fortified--customs duty, .31 per liter; excise duty,
.5315 per 100 liters; vat payable, 14%. Unfortified--customs duty,
.31 per liter; excise duty, .36 per 100 liters; vat payable, 14%.
The South African wine industry has made great strides forward with the application of modern scientific viticultural and enological practices and the use of state-of-the-art production equipment. The continuing research into varieties, soil types, disease and plant quality control, fermentation, etc., at the nation's research facilities will help ensure the future growth and economic viability of the South African wine industry.
American business involvement in the evolving South African wine industry is worth investigating!
Members of the Delegation: Gordon W. Murchie, Delegation Leader and President, Vinifera Wine Growers Association, Alexandria, Virginia; Professor Lena B. Brattsten, Department of Entomology, Rutgers University, Jackson, New Jersey; Leah J. Jones, Wine Label Sales, FP Label Company, Napa, California; Carolyn J. Kelley, M.Ed., Wakefield, Massachusetts; Michael & Jacque Martini, Louis M. Martini, Calistoga, California; Anita J. Murchie, Delegation Reporter, VWGA; Albert A. Oliveira Basport Vineyard, King City, California; Donna M. Oliveira, Amaral Vineyard, King City, California; Sharon Osgood, Esq., Law Offices of Sharon Osgood, Grand Island, New York; Wilburt E. Rojewsky, Alasco Rubber & Plastics Corp., Belmont, California.
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