Wine industry woes persist as exports continue to fall

While wine exports resumed following the easing of the strict national Level 5 lockdown regulations to curb the spread of the coronavirus disease (COVID-19) pandemic, wine exports continued to decline in May. This was according to figures released by the South African Wine Industry Information and Systems (SAWIS).

The data indicated that the volume of wine exported in May dropped 8,4% to 29,2 million litres compared with May last year. In April, wine exports fell 73% when a ban on the sale and transport of alcohol was imposed in line with the national lockdown, resulting in only 7,7 million litres of wine being exported in April. Maryna Calow, communications manager of Wines of South Africa (WOSA), said the wine industry was currently facing major challenges. She explained that there were many logistical processes involved in the exporting of wine.

“These processes take time and producers were unable to make arrangements in advance as they did not know when they would export their wine again.” She pointed out that there were also many challenges being experienced at the Cape Town harbour. “The port is currently only operating at 50% of capacity. I am aware of producers whose wine has been sitting in the harbour waiting to be loaded for over a month.”

Calow added that the recent cold front also played a role, as many ships could not enter and simply passed the harbour. SAWIS’s figures also showed that bulk wine exports increased 7% to 19,7 million litres in May, while packaged wine exports dropped nearly 30% to 9,5 million litres. Calow said WOSA expected more bulk wine to be exported in the coming months.

“Due to the current constraints at the Cape Town harbour and ships just passing by, many dry goods, such as bottles and corks that producers ordered from overseas, do not get delivered in time. Producers cannot wait until they eventually get these goods and therefore export in bulk.”

She also pointed out that there could be a glut of wine in Europe as wine sales in many of the major wine-producing countries plummeted during the lockdown periods there. Calow foresaw that producers in these countries would drop their prices, which would further add to the woes of the local wine sector.

Despite these challenges, Calow said it seemed as if fewer cellars than expected would have to shut down their operations. She attributed this to the strong demand for online wine sales during the Level 4 lockdown. - Jeandré van der Walt

FW Archive ABOVE: Although prospects for South Africa’s wine industry are currently not looking rosy, successful marketing of online sales has helped producers’ cash flow.