Page 2 SA wine industry’s grape expectations

● Last week saw the launch of HUN, a UKbased canned wine that sources from Stellenbosch.

The three options available include a pale rosé, sauvignon blanc and a low-calorie sparkling rosé, all canned in the UK.

“We never expected to be launching in the midst of a global pandemic,” said co-founder Mark Woollard, who, given SA’s recent lockdown, may have had issues with sourcing stock.

But “as we had pre-ordered stock for a May launch across UK festivals, which are now cancelled, we managed to avoid the issue at South African ports. But we hope things can return to normal as soon as possible for South Africa,” said Woollard.

HUN is fortunate considering the position that South African wine producers — who directly and indirectly support about 290,000 people — find themselves in.

According to the South African Wine Industry Information and Systems, the 1.3Mt grape harvest this year exceeds 2019’s by 8.2%.

“The industry had a very good season overall, which we believe will bring great quality wines to consumers,” said Conrad Schutte, consultation service manager of the wine industry’s representative body, Vinpro.

But many consumers, both locally and abroad, may not have the opportunity to enjoy the wine from this year’s bumper harvest.

The local ban on the sale and export of wine as of midnight on March 26 left many wine farms in a financial quandary.

According to Maryna Calow, communications manager for industry body Wines of SA (Wosa), half the country’s wine is exported and the rest is consumed in the local market.

“In terms of potential revenue lost, we are looking at losses on exports of between R175m and R200m per week, and R250m a week on local sales,” said Calow, who estimates the lockdown has already resulted in R2bn in lost revenue.

Following the lockdown, wine farms that export the bulk of their production saw a glimmer of hope.

“On April 7 it was gazetted that exports of ‘finished’ wine may resume,” said Calow, explaining that “this could only be wine that was literally ready to be loaded on a container and shipped”.

But, on April 16, the government did an about-turn and banned wine exports again — and then changed its mind again.

“As of May 1, we could again resume with exports and the manufacturing of wine for the purpose of export; eg bottling, labelling, packaging, certification etcetera,” said Calow.

“We are aware of job losses, but hopefully with exports now being allowed it will bring relief to some of the producers.”

But the estimated 400-million litres of wine exported annually may not all be able to be shipped this year.

“Last week we heard that the harbour was only operating two of its four berths,” said Calow, which means that much of the wine may not leave the country.

According to a statement issued by Transnet spokesperson Nompumelelo Kunene at the outset of the lockdown, Transnet decided “to scale down all of our transportation services operations of non-essential cargo during the state lockdown”. This included reducing the number of operational berths at ports.

Kunene did not confirm the number of berths that are operational.

It isn’t just the short-term effect of lost revenue that affects the local wine industry, but the potential loss of future sales. International customers who do not receive their wine orders may seek product from other wine-producing regions.

“It’s difficult to know whether we’ve lost listings due to the export ban as yet, but there may be cases. To get a listing often takes years and once you’ve lost that listing, it could take years to get it back,” said Calow.

As for producers that supply the local market, the future of their businesses looks dire.

Bernhard Veller, the owner of Nitida, a wine farm in the Durbanville region, said his business “is completely in limbo. It’s the uncertainty that is most difficult.”

Veller exports about 5% of the wine produced at Nitida, 45% is sold directly off the farm and the balance is retailed through supermarkets like Woolworths and Checkers.

“I’m scrambling. I can probably survive for a month and a half, two months more it’s a maybe, after three months I don’t know,” he said. For his business to recover, he would need to start selling wine before the end of May.

“If I can’t sell wine this month, I can’t cover salaries,” he said.

Veller is looking to the UIF’s relief scheme for financial support.

But while the 50% support for farm labourers and 20% for the rest of the staff may help, it is still a considerable shortfall in salaries for those in his employ.

“I have had someone working for me for 21 years,” he said, adding that he was unsure of how he was going to tell this dedicated employee that there may be no money to pay his salary.

Veller is placing a lot of faith in the actions taken by industry bodies Vinpro and Wosa.

“Extensive lobbying has taken place throughout the lockdown period,” said Calow.

The organisations have made various submissions to the government, including for local sales, in particular online sales with contactless home delivery.

But government hasn’t engaged with the industry on local distribution.

“With all our communications to government we have outlined processes that we can put in place to ensure the safety of our workers and those receiving their wine.

“We have made it abundantly clear that we support the government in its efforts to flatten the curve,” said Calow.

When it comes to easing restrictions regarding local distribution, the government’s only response has been to acknowledge receipt of the proposals.

Wine is SA’s second-largest agricultural export.

We are looking at losses of R250m a week on local sales