Despite relaxed export rules,

Wine harvest. Photo: Adobe Stock

Despite relaxed export rules, winemakers still detect some sour notes

Despite relaxed regulations on wine export, industry leaders are still desperately concerned about the future of South African winemaking

Despite relaxed export rules,

Wine harvest. Photo: Adobe Stock

Government has bowed to pressure from South Africa’s wine bodies and lifted the suspension of the export of our world-famous wines during the nationwide lockdown. 

The news should come as an enormous relief to winemakers, who fear that the unprecedented financial meltdown underway across so many industries worldwide, combined with impractical lockdown measures at home, would utterly cripple South Africa’s wine industry.

However, many winemakers still feel left in the lurch and uncertain about the future of the industry despite the amendment, with a decimated local market and subsidiary revenue streams also compromised. 

Export of wines permitted

The latest government gazette published on Tuesday 7 April stipulates that wine will be permitted to be exported under certain 

“During the lockdown period, the transportation of the wines and any other fresh produce products at the seaports and international airports designated as a port of entry for export is allowed,” the gazette reads. 

“Agricultural cargo is allowed to be transported to seaports and international airports designated as ports of entry and exported to the relevant destination.”

Non-profit wine body VinPro, which represents some 2 500 wine producers and industry stakeholders, had said that if the ban remained in place by 17 April, it could entail a conservative loss of direct export revenue amounting to more than R650 million ($36 million). 

“The South African wine industry is truly grateful to government for showing an understanding for the industry’s challenges through this concession,” they said. 

SA market remains in tatters 

Dana Buys, who owns Vrede en Lust winery in Simondium, Western Cape, said that the news about a change to export regulations did little to excite him in the face of a dire financial landscape for businesses that focus on the sale of wine within our borders. 

“We are not really that excited about this development, because we are a business focused on the South African market. I understand to a certain extent the need to limit alcohol abuse at this time, but there was no consultation with the industry.”

“Government has never supported the local wine industry,  unlike Australia, New Zealand and Europe, where the wine industries are well supported.”

“Marketing to a South African market under these conditions means that revenue completely dries up. Many farms, whose profit margins versus volume are not sufficiently well established, will really struggle.”

Buys added that many farms also rely on other streams of revenue (such as wedding venues, accommodation and restaurants) to stay afloat, and said that those facilities had also been brought to a grinding halt.

“It will be very difficult for many wine producers to emerge from this successfully,” he said.

Vow to cooperate 

Indeed, wine bodies are aware that they must still operate at a drastically reduced rate of production. In a joint statement by cooperative wine bodies Vinpro, Salba and Wines of South Africa, farmers were urged to stick to the rules regardless.

“Our interpretation of the published directions therefore allows the transportation of wine that is ready for export, both packaged and bulk. Thus, the starting up of bottling lines and production is NOT what the minister has granted us permission for,” the bodies say.

“We would like to urge all wine members to follow the said protocol that is recommended for both packaged and bulk wine. We do not want to commit to one thing and doing another. 

“In the interest of maintaining relationships with government and showing our commitment to fighting the spread of the COVID-19 virus, please apply the social distancing measures, keep staff at home wherever possible, use skeleton staff when loading containers.”

Challenging times

The wine industry employs about 290 000 people and exports on average between 420 million and 450 million litres a year.

Following three years of crippling drought though, the industry only exported 320 million litres of wine in 2019.

“We were hoping that 2020 would be a year of recovery for the wine industry and that yields would be better following strong winter rains in 2019,” said Maryna Calow, a spokesperson for Wines of South Africa (WoSA).

The value of wine exports dropped to R8.7 billion last year due to lower yields from R9.3 billion a year earlier.

‘An important lifeline’ 

Jean Engelbrecht, who own Rust en Vrede wine farm in the Western Cape, also called for a measured response to the amended laws, pointing out some “grey areas” and lingering prohibitive aspects of the current rules. 

“We see it as a very important lifeline, as there is no income at the moment,” he said. 

“[The permission] is only applicable for wines that have have been prepared, which leaves us between a rock and a hard place. Most of the people in this line, packaging, bottling etc, can only be available after the lockdown.”

He asked for government to reconsider their position on the matter, with severe implications expected that could see a mass fallout in the industry. 

“As an industry we will request government to address the issue. We need the understanding of suppliers on the other side, but also we must walk the line with government.”

“As an industry we are supportive of the lockdown, but we don’t know what the future holds. If we can continue to produce, we can hold out, but we need to keep hold of shelf space overseas, because those relationships that we have established over decades fall away very quickly under these circumstances.”

He said that he was relieved that the harvest could still go ahead, with hundreds of farms preparing for the critical period over the next month. 

“We can continue our harvest at least. We don’t want to overstep the line and interpret things incorrectly, there are several grey areas.”