Wood imports cost wine industry millions!

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WINE in WOOD and WOOD in WINE
Wood imports cost wine industry millions!

Charl Theron, Extraordinary Lecturer, Stellenbosch University
Tim Rypstra, Professor of Wood Science
Jan Swart, Director: Wood and Fibre Institute
Since March 2005 Winetech has been funding a multi-disciplinary wood research project at Stellenbosch University. Researchers from the departments of viticulture and oenology, as well as forestry and wood science, have to determine whether sufficient applicable wood knowledge is available to the local winemaker and whether the flavourants that are naturally present in wooden barrels and alternative wood products (wood staves, wood chips and wood powders) and that are created during the production of these wood products, are utilised optimally in the vinification process. In this column regular feedback will be given about the progress that is being made with the project as well as new perspectives.
Any winemaker is aware of the huge annual financial outlay to purchase wooden barrels or alternative wood products that are used in the vinification of wine. The motive for and usage of alternative wood products are the direct result of the high price of barrels. The total financial impact of wood imported by local wine and brandy cellars is not common knowledge. The barrel is no longer used as a container only; wood plays a role in the maturation process in that the aromatic components that are extracted from it, contribute to the complexity and quality of wines and brandies.
According to statistics provided by SA Customs and Excise which handles all oak wood imports, for the wine industry specifically under tariff number 44160000, an annual average of R160 million worth of barrels or related wood products was imported for the period 2003 to 2005. (Heyns, 2006). In addition to the high cost to the cellar, this is currency that has left the country.
To comprehend the actual extent of this amount, one should take a look at the following comparison. The total wine industry producer income for 2004 amounted to R2 790 million. In terms of imports for 2004, wood imports therefore amounted to 5,7% of the local producer income for that year. Interesting facts and questions arise if the statistics are presented in terms of tons imported per individual country or price paid per kilogram.
Figure 1 indicates the minimum and maximum tons of oak imported from various countries in the period from 2003 to 2005. The data does not reveal, however, whether the wood originates from that country or whether it was purchased elsewhere and exported via that country. The following is clear, nevertheless:
France, and to a lesser extent the USA, are the countries from which the most oak by far is imported. This correlates with the emphasis that wine makers throughout the world place on French and American oak. Certain countries such as Australia and Chile that appear on the import list, have very little natural oak forests (Quercus species) that are suitable for the vinification process. If these countries are currently important suppliers of oak products to South Africa, the question must be asked why local companies cannot adopt the role of purchasing suitable oak and adding value by means of manufacture.
Figure 2 indicates the minimum and maximum prices (R/kg) that are imported annually from the respective countries during the period 2003 to 2005. The following observations may be made:

Three price groups may be distinguished. Firstly the R0-20 per kg, which is the lower price category, and is applicable mainly to the import prices of alternative wood products. Secondly there is the R20-60 per kg category, which is the middle price and applicable to a mixture of wooden barrels and alternative wooden products, and thirdly the high category of R60-80 per kg, which applies mainly to the sale of wooden barrels.
Although American oak is cheaper than French oak, the prices are not of the same order of magnitude.
The large differences in price may be ascribed to the difference between the unit mass price of barrels and that of alternative products such as wood staves, wood chips or wood powder.
Countries with a lower unit mass price probably export more alternative wood products than barrels to South Africa.
To summarise one might mention that many countries export oak products to South Africa and that the unit prices of the oak products from these countries differ dramatically. This situation complicates the choice, control and decision making of cellars regarding the purchase of oak products. This situation can only be improved if purchase specifications of wood products are more precise and focussed. This will be addressed in a follow-up article.
Reference:
1. Heyns , J. 2006. Personal communication

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