Initial forecasts by Vinpro indicated that 10% of all wine-related jobs would be lost, and 80 producers and 350 wine- growers were expected to close their doors. A July survey of wine grape producers, wineries and other wine-related businesses conducted by Vinpro found that 58% would have to make “drastic” changes over the next year to overcome the challenges brought on by Covid-19 and a further 22% will probably not survive at all. This figure increases to 46% for black-owned brands and farms that tend to be more reliant on the local market, hospitality, and cellar door sales, which completely disappeared as international and domestic tourism stopped. 

The domestic sale of alcohol has now been banned for four separate, prolonged spells since March 2020, and off-trade sales are still prohibited on weekends. The idea is to lessen the strain on the healthcare system by reducing the number of alcohol-related hospital admissions. Alcoholism remains a major healthcare challenge facing South Africa, an issue with roots in apartheid, when wine farms, particularly in the Western Cape, implemented the dop system, where workers would receive a daily truck payment of cheap wine. This exacerbated alcoholism, particularly among impoverished communities, and while the dop system may have been ended by Mandela’s government in the 1990s, its destructive legacy persists. 

By some accounts, prohibition has been largely effective in its aims, but the blanket approach has ravaged the wine industry and the policy has become embroiled in controversy. Zweli Mkhize, the country’s former minister of health who led South Africa’s response to the Covid-19 pandemic, resigned in August after being found at the centre of a corruption scandal when it was revealed that he received tender in exchange for awarding government contracts. 

“They have created an implosion through a combination of historical neglect of their duties and an inappropriate response to the pandemic,” says Bruce Jack, founder of the eponymous wine brand. “The wine industry has been changed forever by the bans. It has been hurt and weakened and the long-term effects of this on job creation and the fabric of rural Western Cape will be felt for decades. It is now, more so than before, up to the businesses that have survived in this environment to provide things like food relief, infra- structure, and educational opportunities, as it is clear national government neither want to help our poor, rural communities, or are even capable of doing so.

“Instead of creating extra critical care capacity in our hospitals it is much easier to close down elements of the economy and this short-term gain has a long-term pain and sectors of the South African economy so crucial to sustain- able job creation like wine and tourism will suffer for decades. 

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“The total bans we have had have been devastating to our business, because such a large percentage of sales of our super-premium wines have traditionally happened in South Africa and through restaurants and independent retailers.” The blunt force of the domestic alcohol bans has been disastrous for the country’s wine industry, but it is possible to see a logic to a decision made by a panicking government forced to act incisively to protect its citizens. 

However, even ardent supporters of the government might find the so-called export ban harder to ratify. At the outset of the pandemic, Cyril Ramaphosa’s government prohibited the transport of all goods to seaports and international airports. A week later, an exception was made allowing wine to once again be transported abroad, then another U-turn banned the practice nine days later. Although no reason was provided officially, it was thought that fears of looting and alcohol theft prompted the change. 

“The export ban was not only extremely harmful, but also completely unnecessary,” says Deidre Taylor, sales & marketing manager at Kanonkop. “It did nothing to reduce the Covid cases but it was very damaging to an industry that exports around half of its production each year 

“We were also fortunate to be able to get a container out during the small window that opened in the midst of the export ban so our losses were less than others, but who knows what the sales could have looked like.” 

SUPPLY ISSUES 

The turmoil created by such heavy- handed policy meant that the impact of the transport ban was felt far beyond its five-week duration. 

“With the ban on transport, producers couldn’t get the wine to the port, but what also with everything shut down there were problems with get- ting dry goods like bottles and corks,” says Jo Wehring, UK market manager at Wines of South Africa. “Then the port was operating at 25% capacity, so even if you could get your wines to the port, you couldn’t necessarily get them shipped. Then, on top of all of that, there were some severe weather conditions, so ships weren’t even docking. Everything was compounding problems in terms of getting wine out to markets. South Africa lost out because of that, and we were probably still feeling the impact in the autumn, six months later.” 

The response from the international community has been a shot in the arm for South Africa. In the UK, where a quarter of all South African wine exports end up, sales increased by 23% in 2020. “This year, up to August 2021, we’re up a further 29% in value, and if we take packaged wine out of that then we’re up 46%,” says Wehring. 

In the spirit of support that the pandemic created, many who became aware of the situation in South Africa were compelled to offer their backing. “We had a flow of support coming from the trade once wine could flow into the UK,” says James McKenna, sales & marketing director at New Generation Wines, a London-based importer and wholesaler that works with many South African producers. “We got more promotional space and certain retailers featured South African wines more. We had the initial trauma but the support that emerged from it was wide-spread and that was very well received. It wasn’t charity because retailers recognised the quality, diversity, and value for money of the range, so they knew they were backing a strong horse, but it was good to see that solidarity.” 

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And now, after several years of slimmer pickings, the 2021 harvest has proved to be of decent size and excellent quality.

“This year was the first year following the drought in 2015-2018 that our yield was back to a normal level, so we needed some positivity, even though there were some producers that had to resort to some interesting measures to play wine Tetris in their cellars,” says Maryna Calow, communications manager at Wines of South Africa. 

But while the promise of quality wine i
s certainly a positive one, it does create a set of specific problems for a region still on its knees. 

“We are very happy with the quality of the 2021 harvest, for us the quality of the harvest far outweighs in importance the size,” says Taylor. “A bumper quality harvest will only be beneficial to the industry if there’s increased demand for the wines and a market to sell them to, otherwise it means increased production costs, and more warehousing needed to store it all.” 

And there’s still the question of what to do with the stocks of wine that producers have been unable to shift.

“The problem that some producers have is that a lot of producers are sitting on a lot of stock that they were unable to sell in 2020 and in some cases 2019,” says Nik Darlington, marketing director at independent importer Graft Wine Company. “With all this wine sit- ting there needing to be sold, and with a limited amount able to be turned into grape distillate, a lot will probably be thrown away. 

“The overall health of the industry is still in the balance. There are a lot of producers still not making any money. According to Vinpro, about 40% are breaking even, 40% are making a loss and the rest are making varying amounts of profit. When you’ve got a situation where people aren’t making the economics of grape-growing add up, a couple of years of under-supply was actually quite good because it pushed the price of grapes up.” 

LEVERAGING WEATHER CONDITIONS 

But as South Africa looks for opportunities in the market, recent climatological events that rocked wine growers in much of Europe and beyond could prove to be advantageous. 

“While we do not revel in the misfortune of wine producers in France, Italy, Spain, California and New Zealand, we do see this as an opportunity to supply our top-quality wine to buyers,” says Calow. 

Darlington agrees. “There is a very high-profile opportunity with New Zealand Sauvignon Blanc. When retailers run out, there’s nowhere better placed stylistically to look than South Africa. But it seems like this will only be a one-year blip for New Zealand, so it may only be a one-year opportunity for South Africa Sauvignon Blanc producers.” 

The situation remains difficult at every layer of the South African wine industry, but green shoots of normality are beginning to emerge. 

With Covid-19 cases seemingly under control for the time being, South Africa’s border is open to international visitors and recently it has been taken off the UK travel red list. This means the country can by visited again by fully- vaccinated tourists from the UK looking for winter sun without having to quarantine on return home. 

Wines of South Africa has also announced that, after two years of cancellations, the Cape Wine show is scheduled to go ahead in Cape Town in October 2022, welcoming a global audience. And, while it will take more than a trade show to restore the region and October 2022 is a way off and some South African wine producers will inevitably be forced to close by then, it does offer the Cape a glimmer of hope that there is a version of normality on the horizon.