“The South African wine industry, including wine tourism, is in a state of disaster. Urgent intervention is needed or else one of the oldest agricultural industries in the country will not survive,” says Rico Basson, MD of the wine industry body, Vinpro.
“Many wine businesses have already closed down due to the previous and current trade restrictions, and the rest of the industry will simply not survive a continued alcohol ban, leaving tens of thousands of employees without any income, possibilities or hope.”
The wine industry has geared itself to reopen domestic trade and distribution with all necessary health and safety regulations in place, while focusing on changing behaviour with regard to responsible production, promotion, trade and consumption. “We therefore support the Western Cape government’s call for the safe reopening of all businesses and the domestic sale of alcohol, along with targeted interventions.”
Western Cape premier Alan Winde said in a recent statement: “For as long as the Western Cape can assure access to health facilities for all Covid-19 patients, the temporary ban on the sale of alcohol should be lifted immediately, in conjunction with the implementation of smart interventions to curb the negative impacts of alcohol over the medium to long term.”
Vinpro has been in frequent deliberations with government since the lockdown was announced in March 2020.
“Since the state of disaster was announced and the whole country was put on full lockdown, we have negotiated with government to allow the wine industry to complete the 2020 wine harvest and then to allow for exports and domestic trade,” says Basson. “We understood the severity of the situation in the country then and now and we supported and still support government’s efforts in saving lives by empowering the wine industry to adhere to all regulations with the necessary information on safety protocols.”
Saving lives, however, needs to be in careful balance with saving the livelihoods of people. Wine is an agricultural product, it’s seasonal, which means that vines don’t wait for trade restrictions to be lifted before they produce grapes. “Our producers are already preparing for the 2021 wine harvest, however with close to 300 million litres of surplus wine still in cellar tanks, we might not have space for the new crop. The situation is dire,” Basson says.
While many view legal action as the most effective means to reopen trade, Vinpro believes that the most urgent and productive discussions affecting policy in the short, medium and long-term are taking place at a high level directly with government, business, labour and civil society through the Nedlac forum.
“That is why Vinpro, together with the rest of the alcohol industry, has been working towards establishing a new social compact which positions short-, medium- and long-term solutions and targeted interventions to the societal challenges linked to alcohol abuse and its impact on the health sector.
“As the custodians of the South African wine industry, we strive towards securing the future of our industry for generations to come. We therefore choose to work with government on solutions that will stabilise the sector right now, rebuild it in the medium term and grow the industry in the long run.”
The industry requested and analysed the empirical data on which the sales ban decision was made, and proposed and agreed to a set of conditions that would serve as prerequisites to lift the ban, including commitments with regard to alcohol harm reduction projects, health system support, limited marketing and promotion actions for a specified period, as well as setting up a joint forum to oversee the implementation and monitoring of the short, medium and long term regulatory environment.
“A social compact is an agreement between various parties, not a one-sided concord. It’s a give and take and currently we are frustrated with government’s lack of a commitment on the next action steps.”
The question of whether local liquor sales will be opened up when the current advanced alert level 3 is re-evaluated from 15 August onward, will be a make or break decision for the wine industry. The initial nine-week ban on local sales, and five-week ban on exports will result in more than 80 wineries and 350 wine grape producers going out of business, with a potential loss of more than 21 000 jobs across the value-chain over the next 18 months which may escalate significantly following the second ban.
According to Vinpro chairman Anton Smuts, the wine industry is also dominated by smaller businesses – 40% of farmers produce less than 100 tonnes and a further 36% less than 500 tonnes per year – of which the majority do not have sufficient bridging finance to get them through the financial drought.
“As one of the oldest agricultural industries in South Africa our grapes are cultivated by 2 873 farmers and their 40 000 employees and our wines are crafted by skilled winemakers and their assistants in our 533 wineries, with many more input suppliers and service providers in the value-chain being dependent on the market reopening,” Smuts says. “For every one job on a farm, a further 10 jobs are created in the rest of the value-chain. We are fed up with the situation. The ban has served its purpose and should be lifted immediately.”
Basson says the industry understands that the current situation remains extremely complex, but because of the decline in the infection rate in the Western Cape and other provinces, increased capacity at hospitals and agreed upon proposals, there is absolutely no reason to keep the current ban on wines sales in place.
“Enough is enough. If you think about it rationally, the ban doesn’t make sense anymore. We have done our utmost to save lives, however, the time has come to now save the livelihoods of the people who work in and depend on the South African wine industry,” says Basson.
