South African wine exports to the U.S. plunged 64% since 2023

South African wine exports to the United States fell 64% between 2023 and the first half of 2026, according to customs data from the United States International Trade Commission, a drop that is now adding to financial pressure on growers and wineries already carrying unusually high stocks.

The decline was far steeper than the 21% fall recorded by Chile over the same period. For South Africa, the numbers point to a market that was weakening before new U.S. tariffs took effect and then became harder to defend as trade policy shifted and importers faced more uncertainty.

Industry analysts in South Africa say the pressure is now showing up most clearly at the farm level. Dr. Kandas Cloete, a senior analyst at the Bureau for Food and Agricultural Policy, said a 2025 study commissioned by the Western Cape Department of Agriculture found that once the current U.S. duty is added to existing prices, South African wine struggles to remain competitive against rival suppliers that face lower tariff rates. Because shipping and distribution costs do not fall in line with the price a producer receives, the hit is felt most directly by growers and wineries.

That strain is colliding with a supply problem. South African producers are holding inventory close to the levels seen during the Covid-19 pandemic, after two successive above-average harvests. Cloete said the stock buildup has been made worse by softer global wine consumption and weaker purchasing power in export markets, leaving producers with more wine to sell into a market that is buying less.

For the beverage business, the figures offer a clear measure of how a tariff regime and a weaker U.S. sales channel can quickly affect the rest of the supply chain. When shipments slow, inventory accumulates, realized prices come under pressure and producers face harder choices about where to place wine, how aggressively to discount and which distribution relationships to protect.

Professor Nick Vink, an agricultural economist at Stellenbosch University, said the U.S. market accounts for about 5% of South African wine exports by value, so the full impact on the sector cannot be reduced to a single number. Even so, he said, the way tariffs have changed has made planning more difficult for producers and exporters. In his view, the uncertainty around policy has been almost as damaging as the tariff itself because wine businesses depend on steady conditions when they make production, pricing and export decisions.

The tariff path has been unusually volatile. The United States imposed a 30% duty on South African wine on Aug. 1, 2025. That rate was later reduced to 12.5% in July of this year. According to the customs trend cited by Vink, South Africa’s slide in the U.S. market had already begun before the 30% tariff was introduced, but he said the on-again, off-again policy environment deepened the downturn by making importers and distributors more cautious.

Vink also warned that shelf space lost in the United States is hard to win back. In wine, distribution is built label by label, retailer by retailer and restaurant by restaurant. Once a brand disappears from a list or a shelf, replacing it later can take time and money, especially in a market where buyers are already consolidating portfolios and reducing risk.

The latest U.S. duty took effect on July 24 under Section 301 of the U.S. Trade Act. The American Chamber of Commerce in South Africa said the move followed a determination by the U.S. trade representative that 60 economies, including South Africa, had failed to effectively enforce prohibitions on forced-labor imports. That trade action added another layer of pressure to an export market that had already been weakening.

The contrast with Britain has been notable. Over the same period, South African wine volumes shipped to the United Kingdom fell just 2%, while the country’s market share there rose from 19% to 22.3%. Australia’s share moved the other way, with volumes down 32%. Pricing has also diverged. South Africa’s realized price per liter for bottled wine rose 12% in the British market while falling 20% in the United States.

Those figures suggest that South Africa’s problem is not simply one of global demand. The country has managed to hold or improve its position in one large export market while losing ground sharply in another. That difference is one reason analysts are focusing on the combined effect of tariffs, policy uncertainty and changes inside the U.S. distribution system.

Siobhan Thompson, chief executive of Wines of South Africa, the export promotion body funded through a statutory levy on producers, said in a written response that the U.S. decline should be seen as the result of several forces rather than a single cause. She cited shifts in consumer demand and consolidation among distributors, in addition to the tariff issue. She said listing decisions are ultimately made by exporters, importers and their commercial partners.

That leaves many producers with few easy options. South Africa harvested two strong crops in a row, but larger harvests are turning into a burden when export demand weakens and local margins narrow. With inventories still elevated, the lower 12.5% U.S. tariff is offering only limited relief, especially for wines already competing on thin margins. Producers can try to redirect volume to other markets, but that takes time, and not every label can be repositioned quickly or at the same price.

The result is a squeeze that reaches beyond exporters and brand owners. When wines become harder to sell abroad, storage fills up, cash flow tightens and pricing power erodes across the chain. In a business where transport, packaging and sales costs are relatively fixed, a weaker return on each case tends to move backward toward the vineyard, where farmers absorb much of the pressure. Thompson said the final call on maintaining or rebuilding U.S. placements rests with the companies and trade partners handling those labels in the market.