SA wine trade lost R7bn over 14 weeks of lockdown, says industry organisation

“The banning and unbanning of alcohol caused havoc in our industry — over 14 weeks we lost about R7-billion,” said Rico Basson, the CEO of Vinpro, an organisation that represents 2,500 South African wine producers, at Wednesday’s Western Cape provincial ad-hoc Covid-19 committee meeting. 

When lockdown was enforced in late March, wine wasn’t considered an essential service, so the industry came to a complete halt. The industry is the country’s second-largest agri-exporter, said Basson. 

Although the wine industry couldn’t sell and transport alcohol under Level 5, it was able to resume the export and transport of alcohol under Level 4. On 1 June, after almost two months, the ban on the sale of alcohol was lifted under the country’s Level 3 regulations, but the resumption of sales was reported to have contributed to an increase in gender-based violence. 

The alcohol industry has committed R150-million to awareness campaigns, which includes providing additional resources to the #NoExcuse campaign to increase counselling support. Funds will also go into awareness campaigns on the dangers of binge drinking.

The banning and unbanning of alcohol has jeopardised the wine industry’s exports, said Basson.

“[The alcohol ban] definitely impacted our [international] competitiveness; we lost shelf space whereas [our competitors] from Chile and New Zealand were open for trade,” Basson told the ad-hoc committee.

The disruption in the wine industry means that it is saddled with surplus stock and farmers won’t be able to harvest all their grapes for 2021, said Basson. He said there were three recovery plan focus areas: sustaining supply, reigniting domestic demand and strengthening skills development, and driving transformation in the industry.

Cameron Dugmore, leader of the opposition in the Western Cape provincial legislature, asked Basson whether there had been progress with the plan and whether there had been engagements with any departments.

Basson said that Vinpro had previously communicated with the National Command Council which had been “frustrating to say the least” because they couldn’t directly speak to the council.

Vinpro had talks with the Minister of Rural Development and Land Reform Thoko Didiza and the Minister of Trade, Industry and Competition Ebrahim Patel.

The lockdown caused a number of job losses which led to an increase in the number of people applying for UIF payouts, which have been riddled with late payment issues and lack of communication.

Other presentations were from organisations such as the Black Business Chamber and the Master Builders Association, which both mentioned that businesses were struggling to get payments from the UIF.

Deidré Baartman, a DA MPL, asked the Black Business Chamber and Master Builders Association how many businesses had been affected by the slow processing of UIF payments.

“I know some businesses didn’t get UIF for all their employees, are you aware of similar incidents?” asked Baartman.

The Black Business Chamber’s Karrimah Jacobs said that many early childhood development centres had last received UIF payments in June.

The Master Builders Association’s Des Paterson said that in April and May at least 20% of their 400 contractors, sub-contractors and manufacturers reported that they had not received UIF payments. In June, about 27% received no UIF payments.

“This has caused lots of friction between employers and employees because employees don’t believe that the companies haven’t received the [UIF] money,” said Paterson.

Master Builders Association health and safety manager Deon Bester said it was too soon to tell what economic impact the lockdown would have on the construction industry. DM