KWV believes that EU subsidies to its wine-producing countries are affecting its performance on the global stage. At the company's AGM yesterday (27 October), the winemaker's chairman, Danie de Wet, said that this inequality gave South Africa the shortest end of the stick.

The recent EU announcement that €450m (US$571.7m) in subsidies to its wine producing members was 40% more than the total South African producer sales and income for 2003, he said.

These subsidies were not only going to the traditional wine producing giants such as France, Spain and Italy, but now also new EU member states such as Hungary, Slovenia, Chechnya and Cyprus.

These previously peripheral players in the wine world, now claimed a much more competitive position and caused considerable downward pressure on the wholesale price of wine, he added.