SA wine in­dus­try loses 900 pro­duc­ers in the past decade

The Star Early Edition - - BUSINESS REPORT - Joseph Booy­sen

OVER the past decade 900 lo­cal wine pro­duc­ers have failed, with 100 be­ing lost ev­ery year, which is wors­en­ing un­em­ploy­ment in the coun­try, Rico Bas­son, the man­ag­ing di­rec­tor of Vin­pro, the rep­re­sen­ta­tive body of the lo­cal wine in­dus­try, said yes­ter­day.

Ac­cord­ing to the SA Wine In­dus­try In­for­ma­tion and Sys­tems, last year in­dus­try rev­enues contributed more than R36 bil­lion to the na­tional gross do­mes­tic prod­uct (GDP) and pro­vided over 300 000 jobs.

Last year the in­dus­try’s re­turn on in­vest­ments was less than 1per­cent due to the drought com­pared with 2per­cent in 2015, he said speaking at the Ned­bank Vin­Pro In­for­ma­tion Day held in Cape Town.

“We are los­ing 100 pro­duc­ers a year. In the last 10 years we lost 900. You can think of the labour com­po­nent that goes with that.” He said South Africa had lost about 1800 hectares in the past two years.

Next cy­cle

“My gut feel is that 96 000ha could come down to 90000ha. Is this unique? No. The Aus­tralians have up­rooted about 32 000ha, Cal­i­for­nia has done 20000ha. We can’t be in­no­cent by­standers but must start do­ing some­thing about it. If we don’t do that we will not be able to catch the next cy­cle.”

But look­ing ahead Bas­son said lo­cal wine sales could grow by about 100 mil­lion litres in 10 years’ time, and thanks to lo­cal play­ers it has now reached 400mil­lion litres in year two. To­tal ex­ports had now reached R9bn.

Mean­while, ac­cord­ing to Shehnaz Somers, the head of com­mer­cial un­der­writ­ing at San­tam, the re­cent spate of fires in the winelands of the West­ern Cape had brought the is­sue of the pro­duc­ers’ risk to the fore, with a num­ber of farms be­ing ad­versely af­fected.

She said the com­pany was as­sess­ing the dam­age and loss as a re­sult of fires spread­ing to well-known vine­yards and guest farms in the winelands and sur­round­ing areas over the past month.

“Our claims team is as­sess­ing about 50 claims re­lated to the re­cent fires, most of which are re­lated to build­ings and vine­yards, but it is still too early to re­port on the ex­act ex­tent of the dam­age. We know that last year, run­away fires de­stroyed vine­yards in Stel­len­bosch, Over­berg, Si­mons­berg and Ko­gel­berg early in 2016 re­sult­ing in losses es­ti­mated at around R240 000 per hectare.

“This in­cluded the loss to the farm­ers and the ad­di­tional labour costs re­quired to reestab­lish the vine­yards.”

Somers said it could take be­tween five and seven years for an av­er­age wine vine­yard to be­come pro­duc­tive again after a loss or sig­nif­i­cant dam­age.

“The de­struc­tion of vine­yards by fire, crime or weather-re­lated events also has a sig­nif­i­cant im­pact on the over­all pro­duc­tion vol­umes which in turn places in­ter­na­tional ex­ports and rev­enues, and ul­ti­mately the liveli­hoods of those com­mu­ni­ties en­gaged in the wine-pro­duc­ing sec­tor at risk.”

Somers said last year San­tam paid 596 claims worth more than R9.4mil­lion to the in­dus­try. She said they were specif­i­cally re­lated to agri­cul­tural as­sets and, in many cases, were as a re­sult of fire, ac­ci­den­tal dam­age or li­a­bil­ity.

“The wine in­dus­try re­quires a highly spe­cialised ap­proach to in­sur­ance which is why we have a team of ex­perts who are adept at their ap­proach… We be­lieve that safe­guard­ing their rev­enues is pivotal to the… sus­tain­abil­ity of wine farm­ing in South Africa.”

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