South Africa Lifts Wine Sales Ban, but the Damage is Done

South Africa wine
Erica Taylor, Painting by Tattoo Art Foxtini

Imagine an industry, on which 290,000 lives are dependent and which generates an annual total income for the economy of R55 billion (approximately $3.6 billion), having sales of its lifeblood banned, not once but three times in less than a year.

That is the scenario for South Africa’s wine industry, which has played out since the beginning of the novel coronavirus pandemic in March 2020.

On March 17, 2020, shortly after the first case of Covid-19 was confirmed in South Africa, President Cyril Ramaphosa announced a National State of Disaster. The first Level 5 lockdown period started on March 27. It imposed stringent restrictions, including bans on all alcohol sales and the transport of alcohol, and permitted the continuation of essential services only, which didn’t initially include the wine harvest that was largely complete. The nonprofit organization Vinpro, however, successfully urged the government to at least allow the harvest and all corresponding winemaking procedures to be completed.

The purpose of the ban was to free up hospital beds for Covid-19 patients rather than trauma cases caused by alcohol use and abuse, which is a common admission occurrence for South Africa’s hospitals, especially over weekends.

Exports, which account for 45% of South Africa’s wine sales, were also not permitted during the first five weeks of the lockdown. Export restrictions were eased on May 1; but, even then, Cape Town’s port was only operating around 25% of capacity, which resulted in shipping delays.

Local alcohol sales were banned through June 1, and then resumed with restrictions: retail sales could only take place Monday through Thursday between 9:00 a.m. and 5:00 p.m. Additionally, consumption could only happen at home. While better than a full ban, these restrictions continued to significantly effect retailers and on-premise opportunities and the hospitality sector overall, like tasting rooms and winery restaurants.

The partial relaxation lasted until July 12, when the ban on all alcohol sales was again reinstated due to a steep increase in Covid-19-related hospitalizations.

“We are fighting for our survival as we survey the staggering volume of grapes that hang on the vines of our beautiful valley, waiting to be picked.”—Mike Ratcliffe, Stellenbosch Wine Routes, on January 28, 2021

The situation in hospitals eventually eased following a decrease in the daily case rate as well as an improved recovery rate, and the ban on alcohol sales was again lifted on August 15. While many were relieved to resume business, there was widespread concern about the significant impact the bans already had on South Africa’s alcohol industry.

“Although we are grateful to start trading and delivering online sales again, we are dismayed at the extent of the damage caused to our industry during the temporary ban on exports and extended restrictions on local sales,” said Rico Basson, managing director of Vinpro, in a release dated August 15, 2020. “It might be too little too late. Many wine businesses have already closed down and a long road to recovery lies ahead for the industry as a whole.”

At that time, industry bodies for the country’s alcohol producers reported revenue losses of more than R25 billion (approximately $1.6 billion). There were about 120,000 drinks-industry jobs lost since restrictions were first imposed in March 2020. The bans have had a sweeping effect, from growers and producers to distributors, retailers and even suppliers, like those that manufacture or sell production equipment like machinery, bottles, closures and even labels. At one point, the beer companies completely stopped brewing.

The wine industry alone, which includes wine tourism, lost R7 billion (around $464 million) in direct income as a result of these two bans, with projections that each week alcohol sales were banned cost the industry R400 million (approximately $26.5 million). Vinpro estimated that while many had already shut down as a result of the lockdowns, more than 80 wineries and 350 wine-grape producers would go out of business over the next 18 months, with a potential loss of more than 21,000 jobs.

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Despite trying conditions, wineries and retailers showed fortitude and resourcefulness. Normal sales might have stalled, but nothing stopped online sales, with deliveries scheduled for after each ban was lifted. Sales duly soared; at one winery, May sales increased 1562% over the previous month, while a retailer experienced online sales increase from 10% to 80% over three months. Retail lessons learned during the bans will assist a responsive approach to future online sales, which will now be more widely used by wine lovers.

In December, a new Covid-19 variant started wreaking havoc in South Africa. Steep rises in cases ensued, leaving President Ramaphosa and his National Disaster Management Council no choice but to shut down alcohol sales again, for the third time in a year, beginning December 28. The festive season, including New Year’s Eve, was an unusually quiet affair.

On January 15, the Institute of Cape Wine Masters, the Cape Wine Academy, the Cape Winemakers Guild and the Cape Wine Auction Trust jointly issued a letter to South African President Cyril Ramaphosa to urge a lift on the most recent alcohol ban.

The bans have had a sweeping effect, from growers and producers to distributors, retailers and even suppliers, like those that manufacture or sell production equipment like machinery, bottles, closures and even labels. At one point, the beer companies completely stopped brewing.

“Whilst we acknowledge the distressing consequences of this rising wave of the Covid-19 pandemic and the critical availability of hospital beds, we implore you to work with us to explore alternative mechanisms, for which there are precedents, to reinvigorate our industry,” read the letter. “We are on the brink of harvest 2021 with a significant amount of unsold stock which runs the risk of going to waste and destroying significant amounts of economic value.”

On February 1, the ban on domestic alcohol sales was announced to be eased effective Tuesday, February 2. New regulations allow for retail sales Monday through Thursday, from 10 am to 6 pm, with on-site consumption at restaurants, bars and tasting rooms allowed from 10 am to 10 pm and wineries permitted to sell for off-site consumption during normal business hours as well.

Beyond sales bans and restrictions, added to the industry’s strain is the fact that harvest is upon the South African winelands again. This year, however, there remains a glut of unbottled and unsold wine in tank from the previous vintage, a result of the difficult market and sales bans of the product at hand. As harvest 2021 gets underway, estimates place last year’s unsold stock at around 250 million liters of wine sitting in cellars.

“There is no other way to describe it—we are fighting for our survival as we survey the staggering volume of grapes that hang on the vines of our beautiful valley, waiting to be picked,” wrote Mike Ratcliffe, chairperson of Stellenbosch Wine Routes, in an op-ed published January 28, 2021. “We know we have no space in our cellars to make way for the 2021 harvest and grow anxious at the livelihoods that now hang in the balance, not only those of the workers who are directly involved in wine production, but the workers whose industries are supported by it.”

South African wine
Courtesy of Instagram/WittyWineWoman

Responses to the plight of those left without an income and their dependents, mainly farmworkers but also others in the community, was generous and heartwarming, but also largely fell to local wine farms and producers to step up in the absence of suitable government assistance.

Stellenbosch, perhaps the best known of the Cape’s wine regions, initiated #Stellenboschunite, a collaboration of the municipality, University of Stellenbosch and other bodies and local businesses which, via donations, provided weekly food packages to vulnerable families.

“While we should be rolling up our sleeves to harvest, we are back to pouring our efforts into feeding a community which is hungry, jobless and scared,” wrote Ratcliffe.

Bruce Jack, whose wine farm is in the Overberg, a region to the east of Stellenbosch, turned his winery into a central food depot where farmer friends delivered donations of meat, vegetables and other produce.

“At its busiest, the Overberg Food Relief group contributed to feeding 10,000 to 20,000 people a week,” wrote Jack in an open and honest account published January 23, 2021 on The-Buyer.net. “In the middle of our wettest winter in 20 years, those food queues were often in the rain; something breaks inside you when the eyes of a barefoot child in a food queue are full of fear.”

Creation Wines, located in the Hemel-en-Aarde Valley, have supported their staff both financially and emotionally, giving tasting room team and chefs work in the cellar or vineyards. “Every team member needs to remain engaged and feel they contribute even when they cannot work full time,” says co-owner Carolyn Martin. Broader community initiatives have also engaged the winery team, including packing and distributing food and personal hygiene materials to the most vulnerable in the community.

These are just a few of the many individual and community efforts that have popped up across the country’s winelands to help the poor and vulnerable.

“It might be too little too late. Many wine businesses have already closed down and a long road to recovery lies ahead for the industry as a whole.”—Rico Basson, Vinpro, August 15, 2020 

Social media has also proved its worth, with many initiatives to help support South Africa’s wine industry and all of its employees springing up on Twitter, Facebook and Instagram. Support both local and international is overwhelmingly enthusiastic.

Wineland Media got the ball rolling in July 2020, alerting the international market to the situation via social media. Producers and cellars posted photos of employees holding placards displaying #jobssaveslives, many times with the number of people employed by that farm, and #saveSAwine.

Following hashtag momentum, #saveSAwine was turned into a Facebook page and Instagram account thanks to the efforts of Erica Taylor, Will Marais and his partners in About the Winelands. Gaining 50,000 followers worldwide within two weeks, today there are just under 58,000 accounts sharing photos of South African wine they’re enjoying.

Taylor, who currently runs the social media accounts for #saveSAwine, works in partnership with U.S. distributors of South African wine like Cape Ardor, Cape Classics, Capreo and Museum Wines to offer retail packages and promotions in support of the country’s wineries.

“At some point, people will become too poor to work,” says Taylor. “When you can’t afford a childminder, you must stay home. Can’t afford petrol or car maintenance, you must stay home. You can’t afford your children’s uniforms, they can’t go to school, and you must stay home. This is what is happening to the farm workers.”

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Samantha Suddons, owner/winemaker at Vine Venom, urged her online followers to “load a photo of an empty glass and tag your favorite SA wineries, shops, bars and industry people to help spread awareness” with the hashtag #emptyglassSA.

“The photograph of my empty glass is to symbolize what will happen if SA wineries aren’t supported,” said Suddons.

As South Africa’s wine industry tries to survive, there are glimmers of hope. Overall value of exports increased by 7.7% to R9.1 billion (roughly $600 million), and international support offered needed encouragement; in 2020, total exports to the U.S. were up 78% in volume and 20% in value.

“The year 2020 will probably go down in history books as one of the most challenging years for the industry, however despite this, we have learnt to adapt and have explored creative ways of engaging with our partners,” said Wines of South Africa (WoSA) CEO Siobhan Thompson in a recent press release. “While we do not know what the future holds for the South African wine industry, we hold onto the resilience that we have seen in the past.”

Published on February 2, 2021
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