Now it is only a matter of time before some of South Africa’s top wine estates will close their doors permanently as they battle to survive due to a crushed economy and the new liquor sales ban – and the people who will suffer most are farm workers.
Beyers Truter, the legendary winemaker and owner of Beyerskloof in Stellenbosch, says that after 112 days of the covid-19 lockdown many estates find themselves at death’s door. He is known as the world’s Pinotage king after he first started making wine with the red wine grape in 1981.
The former ANC councillor also hosted Cyril Ramaphosa in April last year during the president’s meeting with Western Cape farmers. Truter tells Food For Mzansi the latest liquor sales ban will lead to huge financial losses in the wine industry. He believes that up-and-coming winemakers and farmers will be hit the hardest.
“Everybody is cutting on their demand,” he says. “Eventually that is going to have an influence on the farm workers and the farmer. I have got a worry about that. People with (strong wine) brands are going to survive, but a lot of smaller guys won’t be able to.”
Truter says the demand for grapes has dropped significantly. He estimates that 95% of farmers and farm workers depend on grape sales to survive. “The big cooperatives buy grapes from farmers, work it into wine and re-sell it. Since there is no demand for those wines at this stage, the prices of those wines are going to become much lower.”
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Meanwhile the lockdown and liquor sales ban have pushed thousands of farm workers into further desperation. Nosey Pieterse, president of the Black Association of the Wine and Spirits Industry (BAWSI) and chief negotiator for the Rural Agriculture and Allied Workers Union (RAAWU), says he is angered by the job losses.
Pieterse tells Food For Mzansi it will cause “disastrous casualties” among farm workers. He believes they will be dismissed and, for those who live on farms, afterwards evicted because farmers won’t be able to generate enough revenue to sustain their businesses.
‘Perhaps we must be like the taxi industry’
Abrie Beeslaar is the head winemaker of Kanonkop Wine Estates, a Stellenbosch red wine producer. He tells Food For Mzansi their biggest concern is how they will continue paying their workers if they cannot create revenue.
“Many people will lose their jobs and livelihoods because of this ban. That is the reality. In a few months from now, the same government will expect us to employ people and keep the economy going, but they do not support us.”
Beeslaar says the wine industry is also frustrated with how government altered its own rules for the taxi industry by allowing them to load taxis at a 100% capacity after initially disagreeing. “Perhaps we must also say, like the taxi industry, ‘Sorry, we won’t accept it’ and just carry on with our wine sales. There are many difficult questions, but the biggest concern is how we are going to pay our people on a monthly basis. Who is going to support them to put food on the table?”
If the liquor sales ban carries on for too long, half of the wine industry will close down, Beeslaar says.
Meanwhile Simon Back, the CEO of Backsberg Estate Cellars in Paarl, tells Food For Mzansi the wine industry feels blindsided by government’s new ban on alcohol sales.
“The wine industry is really in shock, and trying to figure out how we’ll make it through this period. And what is extremely difficult is the uncertainty. It would be one thing if there was a ten-day preparation for the period of the further lockdown and then we would have said, ‘Okay, cool, there won’t be sales for a month,’ but it’s very open-ended. That makes it very hard.”
Back says the new liquor sales has been a major blow for businesses across the country. “This will have a massive impact on the whole value chain, from retail through to the delivery, to companies and the producers, like ourselves, through to our staff. I think it is going to put a lot of businesses out of business.”
Urgent government engagement on the cards
Wine industry body Vinpro says the latest alcohol sales ban will especially hit smaller retailers, wine grape producers and wineries. CEO Rico Basson reiterates that days were dark even before Ramaphosa’s shock announcement on Sunday evening.
“It was already estimated that the local wine industry, which employs around 300 000 people, would lose close to 18 000 jobs and that nearly 80 wineries and 350 wine grape producers would close their businesses in the next year due to the previous five week ban on exports and nine week ban on domestic wine sales.”
The industry has also suffered direct losses of close to R3 billion during this time. Basson says, “Although wine exports may (still) continue, the immediate enforcement of the domestic sales ban will also have other unintended consequences, which include further job losses throughout the value chain.”
Vinpro is hoping to urgently engage with both the departments of trade and industry and agriculture, land reform and rural development. It explains that the South African wine industry is unique in that it is part of agriculture, employs a significant number of people, and is characterised by a large number of small and medium-sized enterprises that are dependent on the domestic market and wine tourism. Basson warns, “These businesses will simply not be able to absorb the financial pressures of a further ban.”
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