YOU (South Africa)
The wine farm where the workers are shareholders
Making farmworkers the majority shareholders in Diemersfontein Wines is about leaving a meaningful legacy
ALUSH, neatly manicured lawn stretches out in front of the elegant manor house at Diemersfontein Wine & Country Estate. The Hawequa Mountains loom over the property’s sprawling vineyards near Wellington in the Western Cape, a town renowned for its orchards, wine estates, buchu plantations, olive groves and vine-cutting nurseries, which produce 85% of the country’s vineroot stock for the wine industry.
Behind the scenes are the farmworkers, whose backbreaking labour keeps these industries alive. And now this wine farm is showing how farmworkers can enjoy the fruits of their labour in a more meaningful way than ever before.
“When we came here, we had nothing,” says Tholine Samuels (46), the vineyards supervisor at Diemersfontein, where she’s worked for 13 years.
Through the staff-investment company Thokozani Staff Holdings, Tholine and 64 of her colleagues are now majority shareholders in Diemersfontein Wines, making them the owners of 55% of the successful wine label and its marketing business in partnership with the existing owners.
Thokozani also has its own wine brand and guesthouses and manages the conference facilities on the Diemersfontein Estate.
“Diemersfontein and Thokozani have been running in parallel because you can’t build a business without building the team,” says Denise Stubbs (49), Thokozani’s business development director.
“Now when I retire I’ll know what all the hard work was for. I feel optimistic about the future,” Tholine tells us.
Cheslin Prins (49), who was a general worker when he was first hired, says he was able to develop skills because of the opportunities offered to him. He’s now the estate’s guesthouse liaison manager.
“There’s no window-dressing. I’ve grown because of the opportunities,” he says.
Diemersfontein is owned by David Sonnenberg, son of Woolworths co-founder Richard Sonnenberg.
David (74) built Diemersfontein Wines on the farm his family has owned since 1942, and developed it into a business that includes guest accommodation, a winery, conferencing events and property development.
A school for all communities – Wellington Preparatory School and College – was developed 16 years ago on the estate and will also benefit from this latest deal.
When David and his wife of 46 years, Sue (70), returned to South Africa in 2000 after living in the UK for 20 years, they founded Thokozani Staff Holdings, a staff-empowerment company. The name means “a celebration”.
David wanted to leave a legacy that would make a difference in the lives of his employees.
“We came back because we love Diemersfontein deeply and wanted to see it take its place as an honourable employer,” he says. “And we tried to do it by creating a structure that flows naturally from the resources of the place, which is the people as well as the businesses.”
FARMWORKER equity schemes aren’t new in South Africa – they were first introduced in the ’90s, but were suspended between 2009 and 2014 after exposés showed the programmes
had failed to benefit labourers.
A report by the department of agriculture, land reform and rural development found that only nine of the 88 schemes declared dividends, and there was no meaningful change in the working or living conditions of farmworkers.
The scheme was revived in 2014, this time with the government buying 50% of commercial farms on behalf of workers, with equity shared among staff in proportion to the number of years they’d worked on the farm.
The government’s 50% equity for farmworkers was to establish an investment and development fund to develop workers’ managerial and production capacity, more farm investment and payouts to those who weren’t interested.
But it’s also not working as well as the government had hoped.
Farmworkers say schemes haven’t improved their lives – with many reporting they haven’t received dividends nor been involved in running the business or trained to manage it, according to a report by the University of the Western Cape’s Institute for Poverty, Land and Agrarian Reform.
They also said the government wasn’t monitoring the schemes, and there have been allegations of farmers abusing the system, essentially to get capital out of the government.
David believes the government’s approach is unrealistic. You can’t take someone who’s been a labourer for most of their lives, hand them a business and expect them to succeed, he says.
Thokozani Staff Holdings is based on a shareholding model and was established as a workers’ investment company in 2007, originally with 35 Diemersfontein staff members receiving between R10 000 and R20 000 worth of shares in the Thokozani company, depending on their seniority.
The shares were allocated on condition they continued to work on the farm for five years and contributed 2% of their monthly salary towards acquiring additional shares.
In 2007 a portion of the Diemersfontein property worth about R6 million, which included six plots and an existing cottage, was sold to Thokozani at 20% less than market value.
The purchase was funded by bank loans, staff contributions and a contribution by the government.
Two new cottages, valued at about R3 million each, were built on the property too. Part of this property, which is run as a guesthouse, was used as collateral in 2020 for Thokozani to invest in the Diemersfontein brand.
“In a nutshell, Thokozani has a big asset [the guesthouse] and so we could invest that money into this deal,” Denise says.
“I think David asking the workers to pay for their shares was our biggest breakthrough, because when people trust you, you take them on board as your companions.”
THE farmworkers, supervisors and managers have officially been the majority shareholders of Diemersfontein Wines since November last year, with a 55% share in the successful wine label, farming and marketinginfrastructure business.
“The documents were signed in November, and we went public this year. The deal involves 55% of the equity in our operating company and frankly that’s where the profits and the brand lie.
“So that’s been passed to Thokozani Staff Holdings, which is owned 100% by the staff,” David says.
What makes this deal different from other farmworker equity schemes is that it will be partly funded through own resources, isn’t limited to black staff, and instead of buying the land workers have bought into the brand.
“We’re transitioning our company gradually in terms of skills development, executive control and ownership.”
But it would be presumptuous of him to suggest that all farms should adopt this model, David adds. “I’m not saying everyone can do our model. But everybody can do something and should do something. But they’ve got to do it within the context of their own circumstances, through the people they’re involved with, and taking into account their level of skills and training,” he explains.
Developing the staff ’s expertise and skills is key to Thokozani’s success.
“Our transformation journey has always been about bringing real change to people’s lives,” Denise says.
“It’s crucial to focus on training and development as an absolute necessity to achieve sustainable economic empowerment of our employees.”
‘WHEN I RETIRE I’LL KNOW WHAT ALL THE HARD WORK WAS FOR’