Vinfruco and Stellenbosch Vineyards are in talks to merge the two companies. In a notice issued on Monday, the two wine companies said that their boards of directors were discussing a merger that would create a group with combined annual sales of around ZAR500m (US$76m).

No further details were released about the talks, but Stellenbosch Vineyards has notified its joint-venture partners about the negotiations, the company said.

The need for consolidation among South Africa's smaller wine exporters has become an increasingly urgent issue, in light of a stronger rand and growing international wine surpluses intensifying competition.

Vinfruco is an independent company in which Capespan holds a major stake. Stellenbosch Vineyards announced a joint venture with Constellation Wines last September to market its wines in Europe.