Cape Town - The wine industry has welcomed the easing of export restrictions as a positive step towards boosting the constrained economy.
The R47billion-a-year industry had been affected by the Covid-19 crisis and the national lockdown regulations. However, with the easing of the restrictions after six weeks, industry players expressed hope that the wine sector might be on the road to recovery, especially with wine producers being able to operate and export once more.
According to Shelly Fuller, WWF’s Sustainable Agriculture, Fruit & Wine programme manager, the wine industry suffered losses of about R500million per week, which resulted in a total of R2bn during the lockdown.
Chairperson of the Exporters Club of the Western Cape, Terry Gale, said the resumption of exports could not come quickly enough as exports were one of the mainstays of the province’s economy and one of the biggest employers in the region. According to Gale, the industry had lost nearly 50% of international sales during the lockdown. He said the lockdown had started during peak season in the wine industry and many of the farmers had not completed their harvesting.
As a result, much of the harvest had not reached the producer. Even when production took place, the wine could not be exported, in accordance with Level 5 restrictions.
“Added to this, the wine could not be sold locally either. It was a double-edged sword, with no winners,” Gale said
Mynard Slabbert, co-owner and head of business development at the Michelangelo International Wine & Spirits Awards, also welcomed the resumption of exports: “We are thrilled that the industry will be allowed to export its stock. Not only will this help to save jobs, but it will also enable the industry to contribute to the country’s ailing economy.
“In 2018-19, the industry exported 51% of its stock and we are optimistic that this figure will increase, especially with demand and consumption remaining healthy in markets like the UK and US.”
The government is also aiding the industry and is set to provide about R6bn in short-term assistance.
Some wine producers expressed relief at the news of exports, saying it would help to stabilise their businesses.
“Not being able to trade is debilitating for any business. As the wine industry, we support the workforce and tourism. It will take long to catch-up in a margin-tight industry, but we hope that our customers will continue to support Brand SA,” said Carol Maggs, the sales and marketing manager at Allee Bleue Wines, which exports widely.
Maggs said the company had to find ways to mitigate the impact of loss of international sales on the workforce by redeploying staff to other sectors of the business.
However, the local wine trade is still prohibited, not only limiting sales to the general public, but also downstream in the value chain including tourism, according to Dirk Harris of Michelangelo International Wine & Spirits Awards. He said the industry had to be innovative during this period and come up with new ways of boosting revenue.
Weekend Argus
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