Wine export calamity

The export ban will result in increased hardship for vulnerable communities in the Cape winelands, according to industry sources.

In the space of three weeks, government has imposed a ban on the export of alcohol products, lifted the ban as the result of intense lobbying by alcohol producer organisations, then reimposed the ban, to the specific detriment of the South African wine industry, which is largely centred in the Western Cape.

The initial decision to ban the export of alcohol products, was implicit, in that when the regulations governing lockdown were promulgated in terms of the Disaster Management Act, the manufacture and transporting of alcohol for anything other than medical use, was prohibited.

The knock-on effect of these regulations, promulgated to underpin the ban on the sale of alcohol products for the duration of lockdown, meant that the harvest currently underway could not continue, nor could finished products like packaged and bulk wine which had been certified, be exported.

After intense lobbying by wine industry producer organisations, VinPro and Wines of South Africa (WoSA), the regulations were amended to allow harvesting to continue, to save the 2020 harvest, but the export ban was only rescinded on April 7, again as the result of extensive lobbying.

But some 10-days later, inexplicably, the ban was reimposed.

In a press statement released on April 16, Transport Minister Fikile Mbalula explained it thus: “On 7 April 2020 we adjusted the Directions (sic) to permit export of wine alongside agricultural produce destined for exports markets. Post the implementation of this Direction (sic) concern was raised about the unintended consequences of allowing transportation of wines in the light of the fact that movement of alcohol remained prohibited. These include the criminality that has reared its ugly head in the form of burglaries and theft of alcohol from closed outlets. The movement of wines destined for export markets is one area we will review. In a nutshell, we are no longer allowing movement of wines.”

The confusion over the flip-flopping on this issue aside, this decision comes at a fraught time for the wine industry which, struggling to contend with the after-effects of a less than desirable 2019 harvest, has been hard-hit by the complete ban on alcohol sales during lockdown.

Aside from the alcohol sales ban, wine farms that have invested heavily in hospitality interests, find themselves unable to generate income from such assets, due to the effective travel ban resulting from the lockdown regulations.

The only source of income for the sector, on which over 209 000 people rely entirely for their livelihoods, is therefore, the export market, which has now finally been shut down.

“Wine exports in the Western Cape are an important contributor to job creation and to the economy in the province, and the change in regulations has understandably caused some confusion in the industry. We are currently studying the change to the regulations in order to determine how best to resolve the issue,” Western Cape Premier, Alan Winde, told Bolander on Friday. With between 90% and 95% of wine production in South Africa centred in the Western Cape, and with 50% of total wine production being exported, this export shutdown deals a body blow to the province’s GDP and export earnings.

“As an industry, we are deeply disappointed and shocked at this sudden change of direction, following extensive lobbying with various government agencies to relax the lockdown measures pertaining to the export and sale of alcohol. The livelihood and long-term future of our industry is in grave danger and therefore we will explore all avenues in this regard,” said WoSA spokesperson, Maryna Strachan, on Friday.

But the impact on the industry aside, it is the the vulnerable communities that live in the Winelands that will be hardest hit, according to Lucy Warner, a founding director with her sister, Sophia, of The Pebbles Project, an NGO that provides a range of humanitarian services encompassing education, health, nutrition, community development, and community safety, to vulnerable communities on 49 farms.

“I don’t know what the actual impact will be. Yes, the farmers will suffer, but it’s the people who work on the farms, whose lives are tough enough already, that will suffer most,” Ms Warner told Bolander on Sunday.

“If the government does have a good reason and logic behind (the ban on export sales) then they need to tell everyone, because otherwise it’s just going to descend into anger and bitterness and frustration.

“There is a logic behind the ban on local alcohol sales but there is no logic in banning exports”

But the lack of current export revenue aside, there are longer-term implications for the export ban.

“To get your wine onto a shelf at Sainsbury’s or Tesco’s or Waitrose is bloody hard. It has taken a huge amount of effort and time and money since 1994, for this country to get a 10% share of that market that can just be completely wiped out by this decision. For the industry to get back that (shelf space) is going to be a real uphill struggle.

“The impact on the communities means that someone has to pick up the pieces, and that ought to be government but we know that is not going to happen.

“It’ll be up to NPOs NGOs, and PBOs, who raise most of their funding internationally, but if we’ve lost those overseas markets they are unlikely to be prepared to donate to us.

“It’s a double whammy, because those organisations that try to pick up pieces won’t be able to, because they can’t raise the funds overseas.

Covid-19 is not going to kill those wine farming communities, but (Mr) Mbalula and this ridiculous decision is going to, that is my view,” Ms Warner said.