Wineries rethink their trade plans

Before the arrival of Covid-19 in South Africa, Berene Sauls had dreams of growing grapes near her home village and expanding her fledgling wine business.

The 37-year-old makes about 8 000 bottles a year of Tesselaarsdal Wines, and is one of hundreds of winemakers dotted across the hills and valleys near Cape Town that make up the country’s main producing region.

She buys grapes from nearby Babylon Vineyards, but has bought a property as a place to eventually harvest her own.

Yet the coronavirus outbreak has forced Sauls to rethink her plans: government has used bans on alcohol sales as a go-to method to curb the spread of infection – when the pandemic was in its infancy and again when cases have surged.

A third prohibition was lifted on Tuesday after five weeks, but there’s no assurance there won’t be more.

The South African Breweries responded to the latest ban with legal action and says more than 165 000 jobs have already been lost.

Industry bodies, including the Liquor Traders’ Formation, have warned of the impact on smaller sellers, particularly in poor communities, while highlighting a surge in illegal trade. There’s also been a hit to the National Treasury from a slump in tax revenue.

Yet Distell reported on Wednesday that domestic revenue held steady during the six months through December, despite losing 41 trading days. It got a boost from drinkers stockpiling after being caught short by the length of the first ban.

The wine industry was also able to fall back on exports, which amounted to 319.2 million litres in 2020, only 0.2% less than the previous year, according to industry body Wines of South Africa (Wosa). Volumes held steady even though transporting alcohol was banned for much of a five-week period that ended April, though 2019 output was affected by a lengthy drought, according to Wosa spokeswoman Maryna Calow.

While the winemakers have proven to be resilient, there remain a number of potential longterm challenges that may not be easy to shake off, Johan van Zyl, Distell’s director of the global supply chain, said in an interview.

For Sauls, her dreams of adding grapevines, additional storage and a tasting room to her new property remain intact – but they will take longer to realise.

“That was supposed to be a fiveyear plan, but I’ve had to review it to an eight-year plan,” she said.