In 2019, the South African grape harvest was 1.3 million tons from vineyards predominantly in the Western Cape, and 86% of the crop harvested was used for wine production. This volume made South Africa the eighth most significant producer of wine globally.
South Africa generally exports approximately 50% of the wines produced annually. Then came the COVID-19 pandemic, and subsequent lockdown restrictions which included the prohibition of the transport and sale of alcohol for some time.
The closure and scaling down of businesses, restaurants and other industries linked to the sale of alcohol, such as the wine tourism industry has impacted jobs and livelihoods as firms struggled to meet their financial obligations in the absence of sales.
On August 17, 2020, the lockdown restrictions were lifted, allowing businesses to operate under strict workplace safety guidelines. However, the impact of the lockdown on the industry will be felt for a long time.
During the lockdown, the industry rallied
Extensive lobbying, engaging continuously with various government entities, calling on the government to lift the ban on alcohol sales and for wine for exports to be classified as an essential food product which would allow producers to ship finished goods during the lockdown period was part of the efforts done by the local industry, including role players such as Wesgro, Wines of South Africa (WoSA) and Vinpro.
By March 26 Level 5 regulations were put in place, and the harvesting and cellar activities in the wine industry were deemed as an essential activity during the lockdown, to prevent the wastage of primary agricultural goods. However, the export of wine was prohibited because no wine could be bottled or transported to the port.
During this period the Cape Town harbour also experienced a six-week export freeze and hold-ups, impacting the importing of packaging goods and other dry materials needed by the wine industry.
At this time Wines of South Africa (WoSA) formed an Exporters Task Team comprising other industry bodies and exporters with the purpose to lobby government on the issue of exporting of wine, brandy and spirits during the lockdown. During this period WoSA launched the #SpectacularSouthAfrica #drinksouthafrica campaign in its focus markets to draw attention to the export ban and plight of the South African wine industry in the hopes of encouraging trade and consumer to stock, buy and drink SA wine.
Exports were finally opened on 1 May 2020 however the local market ban remained in place.
The problem was however not quite solved yet as exporters experienced major delays at the Cape Town port terminal, some producers waiting over a month for their shipments to be loaded. Ongoing talks between the Western Cape and the Transnet Port Terminals management saw renewed attempts to alleviate the issues at the port and finally led to a much-improved service at Cape Town harbour, and the wine industry was able to export 38 million litres of wine in July – 12 million litres more than in June.
With the sale of the all alcohol continuing to remain banned in South Africa during this period, and the industry losing billions in revenue and suffering significant job losses, a country-wide coalition, comprising of the National Liquor Traders Council, the Liquor Traders Association, the SA Liquor Brand Owners Association (SALBA), Vinpro, SAB, Diageo, Heineken SA, Pernod Ricard SA, Distell and Wines of South Africa (WoSA) was formed. A further campaign under the #SaveMyLivelihood banner was created to highlight support for those most at risk.
For the first time in history, the South African wine, beer and spirits industries along with the Taverners and Liquor retailers had come together to form a coalition united behind a common goal.
The Western Cape government also put pressure on the national government to allow alcohol sales and the wine-producing sector to be reopened to prevent a jobs bloodbath.
From midnight on August 17, 2020, South Africa entered COVID-19 Alert Level 2 regulations, which also allowed for the sale of alcohol for off-site consumption, from 09:00 until 17:00, from Mondays to Thursdays, as well as the sale for on-site consumption from Monday to Sunday, subject to the curfew (before 22:00).
The alcohol industry has welcomed government’s decision to lift the ban on alcohol sales and reiterated its commitment to partner with the government to create a social compact that drives behavioural change regarding the use and consumption of alcohol.
It has also called for the establishment of a national multi-stakeholder forum with the government and civil society, that will focus on identifying and prioritising problem areas, and jointly designing interventions targeting these critical areas with enhanced current programmes and new measurable and evidence-based initiatives.
Driving export-led growth using a digital medium and collaboration
Wesgro and critical partner Wines of South Africa (WoSA) launched the Cape Export Network in August 2020, a digital matchmaking platform that also provides relevant partner-created content for producers and importers of wine and services.
For example, a producer that may have never exported before, but has found a match on the platform is guided through an Export Advancement Programme (EAP) by sectorial experts and mentors to become export-ready in order to meet the needs of importers.
The Export Advancement Programme provides companies with the necessary tools and technical assistance to build the competitive capacity and allow entry or expansion into key international markets, stimulate job creation and broaden their export base.
Producers also have access to a free-to-use ‘How to Export guide’ created by WoSA, and made available on the platform. They also are invited to become members of WoSA and in doing so have access to further market information, reports and research as well as promotional support materials, while also benefitting from the opportunities to showcase their wines at events in WoSA’s key operating markets.
Importers entering the South African wine market for the first time have the opportunity to do the free Wines of South Africa Online Wine Course. This free course takes the user through a variety of modules that help them better understand varietals, wine styles and the history of the South Africa wine industry. It also gives them insight into the wine-growing regions of South Africa.
Try out the Cape Export Network marketplace here, to find your perfect match.
Here is a list of some of the partner-created content for you to view:
Learn more about South African wines through a free online wine course here.
Need a comprehensive guide on how to export wine, click here.
Interested in finding out more about a virtual wine mission and tasting, read more here.