SPEECH BY HELEN ZILLE
MAYOR OF CAPE TOWN
[DELIVERED ON BEHALF OF THE MAYOR BY COUNCILLOR SHEHAAM
SIMS, MAYORAL COMMITTEE MEMBER FOR AMENITIES AND SPORT]
OPENING CEREMONY OF THE
GREAT WINE CAPITALS GLOBAL NETWORK AGM 2008
COUNCIL CHAMBER, CAPE TOWN CIVIC CENTRE
10 NOVEMBER 2008, 09H00
His Excellency the Ambassador of Germany, Mr Dieter Haller and Mrs Sabine Haller
The Consul-general of the United States of America, Ms Alberta Mayberry
The Counsellor for Economic and Commercial Matters of the Embassy of Argentina, Mr
Rolando Pocovi
The Mayor of the City of Mainz, Mr Jens Beutel
The Executive Mayor of the Cape Winelands District Municipality, Mr Clarence Johnson
Representatives and Delegates of the Great Wine Capitals
Wine industry leaders
City councillors and officials
Performing artists
Ladies and gentlemen
It is an honour for the City of Cape Town to host the 2008 Great Wine Capitals Global
network AGM, in partnership with the Cape Winelands District Municipality.
We are glad to have this opportunity for our local producers to share and develop best
practices around wine farming and tourism with international counterparts, especially around
environmental and financial sustainability.
In Cape Town our increasingly pressured natural environment has placed new demands and
responsibilities on our farmers, vintners and wine industry leaders.
They have risen to the challenge by getting involved in the Biodiversity & Wine Initiative,
which seeks to conserve indigenous habitat in the Winelands.
This kind of sensitivity toward the environment is one of the reasons Cape Town was
recently named one of the top ten sustainable cities in the world by the Ethisphere Institute.
And it also recognises, quite correctly, that a healthy and attractive natural environment is
itself beneficial for the other aspect of wine farming and production, which is wine tourism.
The picturesque settings of our vineyards and wine routes are a key selling point.
At the same time our wine industry also needs to contend with the global recession, which
has pushed the Rand to seven year lows against the Dollar, created turmoil in our national
markets, and cut manufacturing output in key Cape sectors like the motor industry and
textiles by as much as 13%.
While our wine exports and wine tourism industries can benefit from the currency drop in the
short term, shrinking global markets mean that both these sectors may have a harder time
finding customers in the medium term.
This applies to all of our other major exports, and our manufacturing industries in general.
The wine and related industries of Cape Town, like all of our key sectors, therefore need to
focus more than ever on developing emerging strong points, and adapting weaker points, so
that our city can become globally competitive.
This is critically important in our current context, where we face huge developmental
challenges, like a housing backlog of up to 400 000 units, and 25% unemployment, and high
crime rates.
That is why my government’s core strategic focus on infrastructure-led economic growth is
aimed at creating the platform of solid urban infrastructure and services investors require in
order to become more productive.
By getting the basics right, we want to build confidence in Cape Town, attract more
investment, and help existing enterprise to flourish.
By promoting private sector growth, we aim to boost job creation, and drive development.
At the same time, our local industries need to find new ways within their business practices to
maximise productivity and quality, and minimise costs.
In this respect, the Cape wine industry has thus far been a model for other key sectors in the
region to follow and learn from.
Many industries in the Cape and the rest of South Africa have struggled to adapt to our
nation’s shift away from the economic isolation of the apartheid years, and into the arena of
global trade.
But our wine industry has not seen globalisation as the enemy.
Instead it has seized the opportunity.
Our Cape Wines especially have established a solid international profile in wine markets in a
short period of only fourteen years.
As many of you will know, in the financial year ending in July this year, South Africa’s wine
industry reached its record level for exports, with more than 363 million litres sold
worldwide.
It contributed an estimated R24 billion to our gross domestic product, of which about 70%
came from the Western Cape. Our wines are the fastest-growing category in UK retail sales,
and we have growing markets in the Far East, Eastern Europe and elsewhere.
Our wine tourism generated an estimated R6.75 billion last year, which, I am told, is lagging
behind European countries. This is one of the areas I understand will receive attention in this
week’s engagement, and I hope that we will see some innovative approaches come out of
these talks.
Much of the success of the South African wine industry comes from its 350 year long
heritage, which has created wonderful ‘pedigrees’ of wine.
Even within Cape Town, areas like the Helderberg, Constantia and Durbanville have created
world renowned brands.
Yet, another, easy to overlook reason that our wine industry was able to flourish where others
have struggled in the global market is because the farmers, manufacturers and retailers in the
industry formed a viable industrial ‘cluster’, and so became competitive exporters.
Economist Michael Porter, in The Competitive Advantage of Nations introduced the notion of
industrial "clusters," to describe groups of interconnected firms, suppliers, related industries
and institutions that arise in particular locations. He used this idea to explain how certain
cities or countries corner the market in particular value-added sectors.
Silicone valley is a well known example in the case of information technology. But this is a
best-practice model that has worked well for the wine industries in partnered Spanish wine
capitals Bilbao and Rioja, and it is has also made Barcelona a great industrial player in
European biotech.
In the Cape, our wine sector has become one of our foremost business clusters. On the one
hand, co-operation between wine farms, producers, restaurants, hotels and other hospitality
service providers, together with our broader tourism marketing sector, has made the Cape
into an internationally recognised destination for wine and cuisine tourism. We have
successfully brought together the natural, scenic beauty of our region, the historic buildings
and vineyard landscapes, and the aesthetics of wine tasting and consumption.
On the other hand, our local industry has deep networks that have helped maximise its
productivity and efficiency as a well co-ordinated exporting machine. We about 250 local
companies that directly and indirectly service the Cape wine industry in 45 different
categories of business, from bottle manufacture, to producers of specialist air-conditioning
systems and wine racks.
Our tertiary education institutions, together with government, are getting more involved in
strategic partnerships with the private sector to create competitive advantages for our city.
Our wine industry benefits from courses offered at the Vineyard Academy, Wine Training
SA, the University of Stellenbosch, the South African school for Professional Service
training, the South African Agri-Academy, The Cape Wine Academy, the Cape Technikon,
and the Cape Institute for Agricultural training.
Recently we have also seen the introduction of the SA WineStats research initiative, which is
designed to equip wine and wine tourism stakeholders with greater understanding of how to
market their products and services. And we have excellent wine industry associations, like
Wines of South Africa, which help all industry stakeholders share information and
complement each other.
From our side in Government, we are focusing on making a city that is as business friendly as
possible for all involved in the Cape wine industry and its related sectors. We have tripled our
fixed investments in infrastructure over the past two years in order to improve logistics, basic
services and the quality of our urban environment.
In just over a year we will be hosting the FIFA 2010 Soccer World Cup, which will be a huge
marketing opportunity, especially for wine tourism.
And, of course, the involvement of all cities present today in the Great Wine Capitals
Network is in its own right helping to strengthen our already successful industrial cluster for
the mutual benefit of all involved. It offers this valuable forum, ongoing information sharing,
and support services like offices, advisors and other logistical assistance to members visiting
or intending to invest in our region.
Judging by Mr Porter’s study of industrial ‘clusters’, this dedication to network building is
precisely the kind of approach we need to address the current challenges within many of our
other industries.
And I believe that greater co-operation between the wine industry stakeholders, government
and educational institutions will likewise assist in our drive to improve our regional income
from wine tourism.
We already have the basic ingredients we need in this city and the region as a whole.
I trust that this week’s engagement will give our local wine industry stakeholders renewed
impetus to make the most of these key ingredients, and to push our industry to new heights in
the years ahead.
We in local government are committed to working with the wine producers and wine tourism
bodies of Cape Town.
And we look forward to building stronger ties with our regional partners, especially the Cape
Winelands Municipality, and the leadership of our fellow great wine capitals of the world.
I thank you.