Government urged to open taps on wine exports
Major players in industry, including spirits and brandy, warn ban poses threat to their future
MAJOR players in the South African wine, brandy and spirits industries are lobbying government to unban exports, citing the threat that the 21-day lockdown poses to business sustainability.
Industry bodies Vinpro, the South African Liquor Brand Owners Association and Wines of SA (WoSA) said on Friday they had established an Exporters Task Team to try to persuade the government to reopen the export tap.
Vinpro managing director Rico Basson said on Friday that although the group understood the reasons for the government’s drastic measures to contain the coronavirus, the export ban posed a severe threat to the industries.
“The ban on exports and capacity constraints at our main ports will especially have a significant effect on the survival of the South African wine industry and, more importantly, the livelihood of the close to 300 000 persons employed by the value chain,” said Basson.
In a joint statement this week, the task team stated that the limited capacity at the ports that had remained open was one of a number of serious barriers that had to be overcome.
“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,” said the group.
The government announced a 21day lockdown a week ago and introduced regulations including halting wine industry activities, including the production, distribution, and sale of alcohol, including local and exports during the lockdown.
WoSA spokesperson Maryna Calow said the ban on exports had several implications, most severe of which would be companies going bankrupt, particularly if the lockdown was extended without the concession to allow exports.
“It is likely to see a loss of listings, especially in the highly competitive off-consumption retail space. In most other countries, the sale of alcohol for off-premise consumption isn’t banned, so it’s business as usual. If we can’t supply, then they will find someone else who can,” said Calow.
The call for the unbanning of exports comes a week after a last-minute concession by the government.
Trade, Industry and Competition Minister Ebrahim Patel last week gave the industry the green light to continue harvesting and production activities to prevent wastage during the lockdown.
Junior wine producers also received a reprieve after Vinlab, an independent laboratory, was declared an essential service provider, paving the way for them to have their wines assessed during lockdown.
The wine industry employs about 290 000 people and exports, on average, between 420 million and 450 million litres a year. But after three years of drought, the industry exported only 320 million litres of wine last year.