Wine industry fights to lift export ban

Groot Constantia

South Africa was shocked when Police Minister Bheki Cele announced that there will be no buying or selling of alcohol during the 21-day national lockdown period at the justice, crime prevention and security briefing on Wednesday March 25. An even bigger shock to the wine industry was that harvesting and cellar processes were also forbidden during the lockdown.

Industry bodies Vinpro, SA Liquor Brand Owners Association (SALBA) and Wines of South Africa (WoSA) put together an Exporters Task Team to lobby government on the issue of harvesting and exporting of wine, brandy and spirits during the lockdown.

After extensive negotiations with government last Thursday good news came to the industry that in terms of the amendment on March 26, the wine industry has been confirmed as an essential agricultural service, and the industry may complete the harvest and related cellar activities to ensure that the 2020 crop is not wasted.

In terms of this, grape juice which is intended for wine may be transported in bulk, while the transport of alcohol remains prohibited.

As of March 27, the wine industry said it was is in discussion with government to lift the ban on export too.

In communication with members on Sunday March 29, Christo Conradie of Vinpro said the wine industry effectively does not have any sales during the lockdown and every week that exports will remain shut down, translates into a loss of just short of R200 million in FOB export revenue. FOB means “Free On Board or “Freight On Board”, and is a shipping term used in retail to indicate who is responsible for paying transportation charges.

Mr Conradie said even more importantly, it translates into a loss of market share and future revenue streams.

Jean Naudé, chief executive officer of Groot Constantia, said: “We will continue with the vinifying processes in the cellar and will also do some harvesting of muscat during the next few days.”

Mr Naudé said that 98% of Groot Constantia’s harvesting process had been completed before the lockdown was implemented.

He said that all outstanding tasks would be done with labour that is living on the farm without bringing in seasonal labour that could increase the risk of exposure to the coronavirus

“We are taking serious action in the cellar and on the farm to make sure people are not exposed to contamination. We have also closed the farm to the general public in line with the government’s request,” he said.

Mr Naudé, who lives on Groot Constantia himself, also reported that: “We are sitting in absolute peace and quiet on the farm. In the past, the hum of city traffic was always present but this morning it is very quiet.”

As South Africa’s oldest wine producer, Mr Naudé said that Groot Constantia had endured centuries of change, and it is important that through this challenging time everyone should support one another.

The exporting of wine is still on pause because of the ban on the transport of alcohol.

In a letter to their members last week, the Exporters Task Team, comprising various lead exporters and the three industry bodies, stated that: “The issue of not being able to export under the Covid-19 lockdown is a significant risk for the South African wine and brandy industry and one that has a huge human and financial impact on our industry.”

The Exporters Task Team is putting together a case on this issue which the team hoped to have presented to government by close of day on Wednesday April 1.

The group said that one of a number of “serious barriers” which would need to be overcome include the limited capacity within the ports that have remained open.

The joint industry statement reads: “Our objective is to position a convincing argument with regard to the immediate solutions – such as finished goods that are in bonded warehouses – over the remainder of the lockdown, but then also to gear up to be fully operational before the end of the current lockdown period.”

It told its members: “We are acutely aware of the adverse effect that every day without exports has on your business.

“We want to thank you for all the support thus far and want to ask you for some patience to allow us to complete these important deliberations.”

Mr Conradie said while they were not for one moment losing sight of the global pandemic, they were still of the opinion that some low-hanging fruit could continue, without being reckless in dealing with Covid-19.