October 8th, 2010
03:46 PM GMT
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I couldn't help it! But I just had to do another story about South Africa's wine industry. As someone said to me on twitter recently, I am starting to sound like I cover the "wine beat," which doesn't sound like a bad thing to me!

Besides the quaffing benefits, I also think South Africa's wine industry is an important business story that perhaps doesn't get enough attention, what with all the calls for nationalizing mines and public service strikes.

Many South Africans seem to forget the wine industry is a major contributor to the GDP and provides direct employment to more than 250,000 people.

Even though there are huge opportunities for the industry to grow, South Africa's wine makers are struggling. There are a number of reasons for the hangover.

Locally, more South Africans drink beer or whisky than wine. Internationally, the strong SA currency means wine farmers are getting less for their wines in overseas markets.

Wine consultants, like Emile Joubert, are also critical of industry bodies who insist on trying to market South African wines to the United Kingdom, which is over-saturated with cheap, good wines from all over the world.

So, he says, the English supermarkets and wine buyers are "Killing us for price. We are selling wine cheaper there than what it takes farmers here to produce it."

It begs the question why South African wine producers don't look to sell their delicious wine to China, India and, more importantly, the rest of Africa?

So my question is: do you think South Africa's wine industry has missed opportunities to market its product globally?

All of you fellow Africans out there - do you buy Portuguese, Italian or French wines rather than South African wines? Are enough premium South African wines even sold in your countries?



October 8th, 2010
03:04 PM GMT
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Within day of the Gulf of Mexico oil spill the question of who would pay for the clean up was clear - BP was legally responsible and said it would honor that commitment.

The same scenario seems to be the case in Hungary.

The firm, MAL Hungarian Aluminium appears to be liable for the clean up costs of the red sludge.

That's according to the European Commission. Environment spokesman Joe Hennon tells me that under normal EU laws, the operator "should be liable." He says MAL received a permit to operate the plant in 2006 and all the paperwork, on first glance, appears to be in order.

I could not reach the company to get a response. To be fair, the plant has been closed for the week and so no one is answering the phone.

MAL's website does have a statement apologizing to those who have been affected by this. It has also said that it will pay for funerals.

MAL's insurance company, Allianz Hungaria Biztosíto has been authorized to tell the media that MAL has an up to date insurance policy for "property and liability."

But spokespeople for Allianz say they don't have permission to reveal how much that insurance is for. The question many of us then had was what role would or could the EU play in this and is there a pot of money Hungary could tap into?

There is something called the "EU Civil Protection Mechanism" which coordinates disaster response among 31 European countries. It was used during last year's forest fires in central Europe but also tapped for things like the Haiti earthquake.

The 31 countries have been contacted, says the EU and those experts should be found quickly.

But the EU does not respond unless asked by the inflicted country. Hungary has now triggered the mechanism and has asked for a few experts in "handling toxic sludge, decontamination and mitigation of environmental damage."

It's not yet clear to me who pays for them and for any other use of the mechanism Hungary may require.

The Hungarian government said earlier this week the costs will be in the "tens of millions of dollars" but there will be homes that have to be knocked down, owners compensated and relocated. Then there are the health costs and any fines coming down the pipe. 

The EU says Hungary should recover its costs from the company. We are a long way from knowing that bill.

 

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October 8th, 2010
08:15 AM GMT
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Hong Kong, China (CNN) – Chinese Premier Wen Jiabao said in Europe this week that a free-floating yuan would be “a disaster for the world.”

He noted that Chinese export companies have small profit margins and could be hit hard, setting off a potential wave of social turmoil.

Yet a report by Mark Williams, a senior China economist at Capital Economics, on Thursday noted that export margins of Chinese companies did not fall when the yuan loosened its peg to the dollar from 2005 to 2008. The yuan increased in value against the U.S. dollar nearly 20 percent during that period.

In fact, “because most firms were able to raise either prices or productivity, margins did not fall at all” when the yuan rose against the dollar. The price of low-end exports rose, but so did Chinese firms’ market share.

The Chinese government is expected to focus on rebalancing its economy away from exports at its policy meeting next week. Economists at Goldman Sachs and JPMorgan expect they will look for ways to boost domestic consumption and investment and wean China off exports as demand for Chinese goods globally slows down.

That may be good news for China’s trading partners in the long run. But at the IMF meetings this weekend and the G20 summit next month, China’s currency policy is clearly going to remain a controversial topic.

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