Close call for SA wine industry

Vineyards.

The South African wine industry faced a major crisis on the eve of the national Covid-19 lockdown.

The regulations published in terms of the National Disaster Act following the announcement of the lockdown by President Cyril Ramaphosa on Monday March 23, implicitly excluded grape harvesting and vinification from the definition of an “entity involved in the manufacturing, supply, or provision of an essential service or good”, which specifically encompasses “food products (including non-alcoholic beverages).

This would have caused all harvesting operations currently underway – the cooler wine growing areas like the Elgin Valley and the Southern Cape, among others, still have substantial fruit on the vine, which must be harvested and vinified – to cease at midnight on Thursday March 26, when the lockdown came into effect.

Because of the prohibition on the manufacture or transporting of alcohol, except for industrial use, all exports of alcoholic beverages were also prohibited from the time of the lockdown.

The consequences for the wine industry would have been catastrophic, coming off the back of a poorer than expected harvest last year, which saw export revenue decline by over R1 billion, according to producer organisation, Wines of South Africa (WOSA) spokesperson, Maryna Strachan.

“The wine industry is the second largest export revenue earner in the agricultural sector, and 209  000 people in the Western Cape are dependent on the industry for their livelihoods. Stopping harvesting and cellar operations would have resulted in massive losses, with the major proportion of the current harvest being wasted.

“That would have daisy-chained into job losses, a decline in producer revenue, a decline in tax revenue and alcohol excise.”

Thankfully, as the result of urgent representations to government on behalf of the industry by producer organisations WOSA, VinPro and the South African Liquor Brand Owners Association (SALBA), an amendment to the regulations was gazetted late on Thursday evening, March 26, just before the lockdown kicked in. Specifically, * .5 (6) (a) (e) added to the list of essential services: “harvesting and storage activities essential to prevent the wastage of primary agricultural goods.”

While this allowed the harvest to continue by authorising the movement of staff to and from vineyards and cellars, the movement of grapes to cellars, and the continuation of cellar operations, the status of wine exports remained in limbo.

In a press statement on Wednesday March 25, VinPro MD, Rico Basson pointed out: “We will also contest current regulations that prohibit the export of wine. This is an extremely important aspect for current and future economic sustainability and socio-economic stability.”

But the continued lobbying bore fruit, and by Saturday evening, the regulations had been amended to allow wine exports to continue as well. Speaking from her home on Delheim wine estate on Friday, Delheim owner, Nora Thiel told Bolander: “We understand the necessity for the lockdown, and we are in complete support of what government is attempting to do, so we are extremely grateful to government for amending the regulations to allow harvesting and cellar operations to continue, and also for exports to continue. As much as completing the harvest is vital, so to is the continuation of exports to our key overseas markets during this period.”

WOSA, which plays a pivotal role in facilitating South African wine exports to off-shore markets, also expressed its gratitude for government moving expeditiously to lift the export ban, and Ms Strachan explained the importance of the decision: “It is vital that we continue to service our overseas markets in order to maintain our presence on overseas shelves,” said Ms Strachan. “If we can’t fulfil our obligations, importers will look to other wine producing countries. Once we’ve lost that shelf-space, it is difficult to regain it.”