Cape Town - The wine industry currently has an estimated 250 to 300 million litres of uncontracted wine, which is almost equal to annual local wine sales and can potentially put serious downward pressure on wine prices.
This was according to NPO Vinpro and SA Wine Industry Information and Systems, in examining the effects of the Covid-19 pandemic on the sector.
In the run-up to the 2021 wine grape harvest, South African producers and wineries are working together to try to minimise further negative consequences arising from varying restrictions on alcohol sales from March this year, they said.
Whatever the challenges, the focus remained on quality, they added.
Following a five-week ban on alcohol exports and the intermittent 19 week ban on local sales as the country moved through its respective Covid-19 alert levels, interventions have been put in place, including applying for financial relief from the government; stimulating demand locally, internationally and through wine tourism while curbing illicit trade; and then finally reducing supply.
Vinpro managing director Rico Basson said the industry needed to sell an additional 100 million litres in the course of 2020, as coupled with last year’s drought which led to reduced supply and resulted in higher wine prices, the industry took a serious knock.
According to Vinpro senior agricultural economist Pierre-André Rabie, the Vinpro Production Plan Survey – a financial benchmark among primary wine grape producers – enables participating producers to analyse profitability right down to each vineyard block on the farm, region or industry as a whole.
“We can determine which blocks aren’t producing due to its age (too old or too young); which are experiencing problems with vigour or yield; and which do not cover their day to day expenses because they are not producing the quality needed to earn good wine grape prices,” he said.
Vineyard blocks that do not produce good yields or great quality, or for which the producer does not have a buyer, could be shortlisted for uprooting.
Vinpro viticulturist Gert Engelbrecht said: “Many larger producer cellars are making plans to accommodate the 2021 harvest, and grape producers who deliver to these cellars do not necessarily need to reduce their crops.
But why would you decide to keep on a vineyard that’s not making you any money?”
In the Robertson region, Vinpro viticulturist Hennie Visser said the emphasis remained on quality.
“At a time when producers would normally want to pursue volumes, because they know the average wine prices will drop due to the larger supply, we strongly recommend that they keep on doing what’s needed in terms of inputs and practices to ensure smaller volumes, but high quality grapes, as premium wine prices are expected to remain stable,” Visser said.