1. WORLD WINE TRADE GROUP AGREEMENT ON MUTUAL ACCEPTANCE OF OENOLOGICAL PRACTICES AGREEMENT ON THE REQUIREMENTS FOR WINE LABELLING BRIEFING TO THE SELECT COMMITTEE ON LAND AND ENVIRONMENTAL AFFAIRS (NATIONAL COUNCIL OF PROVINCES) 20 JULY 2010

2. WORLD WINE TRADE GROUP The World Wine Trade Group (WWTG) is an informal group of wine producing countries with the following objectives: Facilitate the trade in wine Reduce barriers in the wine trade Share information and collaborate on aspects relating to trade and production of wine Share and exchange laws & regulations related to wine making practices and wine labelling The Group has no formal membership, membership fees and no secretariat. The Group is chaired by a rotating chair who functions as secretariat and organises the meetings of the group (1 or 2 meetings per year). Meetings are attended by both Government and wine industry representatives (in joint and separate sessions). 2

3. WORLD WINE TRADE GROUP The group was formed in 1998. Participants: Argentina, Australia, Canada, Chile, Georgia, New Zealand, South Africa and the USA. The Mutual Acceptance Agreement (MAA) and the Labelling Agreement are at the core of the group. Negotiations on the MAA were concluded in 2001 and on the Labelling Agreement in 2007. All members, except South Africa and Georgia, have implemented the MAA. The Labelling Agreement is at various stages of ratification, only the USA and Chile have completed the necessary internal processes. South Africa actively participated in the negotiations of both agreements but waited for reforms at the OIV before pursuing accession. 3

4. WORLD WINE TRADE GROUP The MAA and Labelling Agreements: Are enabling agreements aimed at facilitating wine trade Are in conformity with the provisions of the WTO Required small changes to South Africa’s wine legislation Will ease the export of wine to signatory countries Accession to the agreements is strongly supported by the South African wine industry 4

5. WORLD WINE TRADE GROUP Mutual Acceptance Agreement Recognizes wine making practices of signatories as compliant with own practices. Includes a common definition for wine. Does not limit rights or obligations under the WTO Agreement. Does not interfere with existing or future agreements on oenological practices with third countries. Benefits for South Africa Reduces cost related to documentation and analysis. Export logistics to WWTG countries are simplified (e.g. currently DAFF has to provide a certificate with each consignment of wine exported to the USA (this requirement will fall away once we have acceded to the MAA) – less pressure on government resources.) 5

6. WORLD WINE TRADE GROUP Labelling Agreement Objective: Accept common labelling information and minimize labelling-related trade barriers. Label information must be clear, specific, accurate, truthful and not misleading to the consumer. Does not prevent national mandatory information (e.g. health warnings). Does not limit rights or obligations under the WTO Agreement. Benefits for South Africa Creates certainty in terms of labeling requirements for WWTG markets One label for mandatory information can be used for all the WWTG markets Reduces cost – do not have to print a label for each market Simplifies entry into and export logistics to these markets 6

7. WORLD WINE TRADE GROUP Legislative changes required to accede to the two agreements: The Liquor Products Act, Act 60 of 1989 had to be amended to provide for these agreements The LP Act deals with production, compositional and labeling requirements, as well as import and export certification of liquor products Table 6 of the regulations was amended in 2008 to ensure that wine containing Pimarizin is not exported to the WWTG countries (Pimarizin is not allowed to be added to wine in these countries, although there is no food safety risk in terms of its use. It is allowed on cheese and sausages in Europe and other countries and it works effectively to prevent the formation of moulds) Section 16 and 27 of the LP Act was amended in May 2009 to allow for the implementation of the provisions of the MAA and Labelling agreement. 7

8. WORLD WINE TRADE GROUP Future Work of the Group include: Memorandum of Understanding on Certification Requirements  to further reduce and ease certification for wine trade Second Phase Labelling Agreement  To address sustainability labelling (e.g. Greenhouse gas emissions, impact on environment) Labelling for allergens (e.g. possibility to use pictograms) Co-ordination with regard to Maximum Residue Levels Outreach in Asia (e.g. China to attend next meeting) 8

9. WORLD WINE TRADE GROUP International Organisation for Wine and Vine (OIV) OIV is an Intergovernmental organisation based in Paris, France (SA has been a member since 1963) OIV is a scientific and technical organisation and provides international standards and guidelines for wine, vine and wine-based beverages, new wine making practices and technologies. OIV went through a review process and the “new” OIV was established on 3 April 2001(prior to this countries were concerned that OIV was too Eurocentric) The USA and Canada are the only WWTG participants that are not members of the OIV. DAFF sees no conflict between OIV and WWTG as the two organisations have different fields of work and objectives and compliment each other (WWTG focus on enhancing trade, while the OIV has a scientific and technical focus) 9

10. AGRICULTURAL EXPORTS: MAJOR PRODUCTS 2008 Source: SARS

11. SOUTH AFRICAN WINE EXPORTS (HS 2204) 2008 Source: SARS

12. SOUTH AFRICAN WINE EXPORTS (HS 2204) R- MILLION Source: SARS

13. SOUTH AFRICAN WINE IMPORTS INCLUDING ARGENTINA (HS 2204) R- MILLION Source: SARS

14. WORLD WINE PRODUCTION OIV FORECAST 2007 1 000 000 HL

15. WORLD WINE CONSUMPTION OIV FORECAST 2007 1 000 000 HL

16. WORLD WINE EXPORTS OIV FORECAST 2007 1 000 000 HL