While cellar capacity and financial liability due to the Covid-19-induced alcohol sales ban remain key concerns for the wine industry, it will now have to make peace with achieving an average of 1.37 million tonnes of grape estimates this year.
According to the latest estimate by South African Wine Industry Information and Systems (SAWIS) and Vinpro, the wine grape crop is at this stage expected to be only somewhat larger than in 2020, but still below the 15-year industry average.
The estimate in January is the second of five annual estimations before the harvest report will be released in May this year.
The wine grape harvest also kicked off two weeks later than usual, which may be a blessing or a curse for cellars, says Conrad Schutte, manager of Vinpro’s consultation service division.
Cooler temperatures and above-average rainfall continued into spring. This further contributed to somewhat late, but good flowering and set.
“On the one hand, it may win some time for cellars to open up processing and storage space should the alcohol ban be lifted in the next few weeks.
“On the other hand, warmer weather is predicted from mid-February until the last week of March, which may speed up ripening and create bottlenecks as some cultivars may catch up and the crop ripens simultaneously,” says Schutte.
Most areas experienced cold weather conditions towards the end of winter to meet vineyards’ cold requirements. Also, above average rain and snow replenished rivers, streams, irrigation dams and soil water levels, explains Schutte.
“Viticulturists are pleased with the amount and sizes of grape bunches at this stage.” – Conrad Schutte, Vinpro
Similar or somewhat larger crop sizes are expected in most areas due to moderate temperatures and sufficient water resources, which resulted in good vineyard growth, says Schutte.
“Veraison (a grapevine lifecycle stage) was also late and slow due to moderate temperatures since the start of summer and we’ve seen less temperature spikes than usual, which limits sunburn damage and helps retain flavour.
“Producers do, however, need to keep an eye out for downy and powdery mildew and manage it proactively.”
Making tough choices
The 19-week alcohol ban since March 2020 has had a negative effect on wineries’ sales volumes and led to higher stock levels.
Producers will have to make tough decisions in the vineyards with cellar capacity under severe pressure due to the continued alcohol ban, says Vinpro MD Rico Basson.
A month into the third alcohol ban and with the 2021 harvest commencing this week, the industry has more than 640 million litres of stock of which 250 to 300 million litres million is uncontracted.
“This poses a material risk of insufficient processing and storage capacity for the new harvest and threatens the sustainability of the wine industry,” Basson says.
While larger cellars have contingency plans which include renting additional capacity, allocating a portion to grape juice concentrate and lowering prices smaller producers may have greater difficulty creating storage and processing capacity, Basson says.
“Slower moving stock due to lower sales figures, cash-flow challenges and the need for additional bridging finance that comes at a cost will all put a huge strain on the sustainability of the industry.
“This will inevitably result in many businesses and farms closing down, along with an estimated 27 000 job losses which will force those most vulnerable in our communities into a poverty trap.”
Lift alcohol sales ban now
This week, Vinpro lodged an urgent application with the Cape High Court to seek interim relief which would afford the premier of the Western Cape, Alan Winde, the power to adopt deviations to enable off- and on-consumption sale of liquor in the province.
Similar relief will be sought throughout the country.
“If the liquor ban is still in force in the Western Cape by 5 February, the date on which the matter is set for hearing, the Cape Town High Court will be asked to invalidate minister Nkosazana Dlamini-Zuma’s ban in the Western Cape with immediate effect,” says Basson.