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BREAKING: A big NO for ciggies, YES for wine exports – and MAYBE for online wine sales

Nkosazana Dlamini-Zuma makes dramatic u-turn on cigarette sales in level 4, but the jury is still out on online wine sales

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After five weeks of considerable pushback and massive financial losses due to the unprecedented covid-19 regulations, Nkosazana Dlamini-Zuma, the minister of cooperative governance and traditional affairs, has just announced that wine, wool and other agricultural products will be allowed to be exported.

The announcement has been welcomed by wine industry body Vinpro and many others, including Dr Ivan Meyer, the Western Cape minister of agriculture. He described the move as “critical for the wine industry”, noting that the province has 98% of all the wine cellars in South Africa.

Thoko Didoza, minister of agriculture, land reform and rural development, announced that most of the agriculture sector and its supporting industries will be open from Friday, including:

  • Mechanization, tractors combines, other implements;
  • Shops that sell agri chemicals, seeds, fertilizers and related inputs;
  • All exports, “Amarula, wool and other synthetic products made out of agriculture”;
  • Beekeeping is now permitted to operate, also at night.
  • Fisheries sector open.Didiza mentions that special arrangements will be made to safeguard masses during the sardines run in June.
  • Harvesting, like the grain harvest (maize and oilseeds) starting this week;
  • Agricultural research;
  • Livestock auctions are allowed, but under strict conditions. Numbers are limited to 50 and proper social distancing must be observed.

“We are allowing all of agriculture to operate, albeit under strict conditions’, says Didiza, emphasizing the need to ensure proper distancing and that workers and farmers have protective clothing.

Exports a huge relief for wine industry

Food For Mzansi can also confirm that wine industry insiders are cautiously optimistic that the level 4 lockdown restrictions commencing on Friday, 1 May 2020 might also include some unexpected good news for wine lovers – despite an unexpected, Wednesday night u-turn on the sale of cigarettes.

Rico Basson, the managing director of Vinpro.

The wine industry has proposed that online wine sales be allowed as part of the country’s risk-based approach to reopening the economy, and they now believe that this might be announced along with other new details of the level 4 lockdown state tomorrow.

Managing director of Vinpro, Rico Basson, says they will communicate exact export details about packaging and support services as soon as the regulations are formally published tomorrow. Earlier this evening, during an exclusive interview with Food For Mzansi, he mentioned that they are also hoping that government will heed industry submissions to allow online wine sales under strict controls.

“We hope that we will get an announcement tomorrow,” says Basson. “And then we’ve made certain submissions for the local market that will be a low-risk avenue. Things like internet sales, delivery with food under strict protocol.”

Up to 15% of SA wineries might close

Basson says the industry made these submissions as “a good start” to reopen the local market in a phased manner. “We do think a proposal could include (limited online sales) and deliveries, as well as some segments of the licensed supermarket chains. But for now I cannot put my neck on the block…”

Vinpro represents some 2 500 wineries, wine grape producers and related businesses. In a wide-ranging interview with Food For Mzansi’s Farmers’ Inside Track podcast, Basson says he fears that as many of 80 of the nation’s 600 wineries (up to 15%) won’t make it through a prolonged coronavirus lockdown. This will result in significant numbers of job losses. “Key for South Africa will be a cash flow drought during June, July and August.”

The prognosis for the Australian wine industry, he says, is that as many as 30% of their wineries will close down in the next few months.

At the beginning of the nationwide lockdown imposed by government to slow the spread of the novel coronavirus, the South African wine industry scrambled when they discovered that wine was not included in essential services agriculture. They got permission to finish the existing harvest and to reopen exports, albeit for only nine days before the exports were closed again.

It has had a huge impact on the industry, Basson says. “The first thing, on an emotional level, is the uncertainty. I think everybody – whilst they can somehow deal with the limitation – wants certainty from government, and the trade demands certainty.”

Financially the industry and the country has taken a huge knock. “The fact that we cannot sell wine locally or export means about R500 million (lost) per week. And we are now in week five, so you can add up the numbers. That’s R2 billion rand of trade that we don’t think we’ll make up if we return.”

The local wine industry has also suffered huge reputational damage in export markets.

The Vinpro boss adds, “Firstly, we were allowed to export for nine days, before that was halted due to covid-19. Your international customers and importers don’t always understand your country, and that in a very competitive market.  So, we are really risking losing shelf space, and it is shelf space that we worked for very hard for over 30 years. All our competing countries, like New Zealand and Australia, have been in the market. Their governments have allowed them to export.”

  • Rico Basson’s full podcast interview with Food For Mzansi’s Ivor Price and Kobus Louwrens can now be downloaded for free on Spotify and Apple Podcasts. Subscribe to “Farmer’s Inside Track” on these channels for a weekly interview with Mzansi’s agricultural movers-and-shakers.
Kobus Louwrens
Kobus Louwrens
Kobus Louwrens is Strategy Director of YehBaby, a digital marketing agency. He is an award-winning environmental journalist, who previously published leading magazines and community newspapers in both South Africa and East Africa. This MBA graduate developed digital strategies for various small-to-medium enterprises and entrepreneurs. Under Kobus’s visionary leadership YehBaby has developed breakthrough digital marketing for numerous agricultural, wine and tourism brands.
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