The South African wine industry's decision to focus more on the marketing of premium and luxury wines was the right route to follow, according to Wines of South Africa (WOSA) CEO, Su Birch.

Birch was commenting on a new in-depth study into the international cost-competitiveness of the SA wine industry.

The study, conducted by wine business analyst, James Herrick, looked into the Cape's wine production costs and compared them to Australia and France.

It found that South Africa performed better in an environment of medium or high-cost wine farming and contended that the majority of the country's wine producing areas were best suited to the production of premium wines and higher.

Birch said one of the most important issues raised by the research was the need for local producers to move away from the mistaken notion that high quality was automatically synonymous with very low yields.

"While even marginal increases in yields can contribute significantly to profitability, our viticulturist experts believe appropriate vine management can push up high quality yields by as much as 20%," said Birch.