Resilient South African wineries look for the silver lining

Battered by COVID and targeted by the government, the South African wine industry is resolute in its determination to ride out the crisis

Words by Adam Lechmere

Harvesting at Kanonkop. "We have to be properly geared up so we can ride it out," says owner Johann Krige

In South Africa there’s an expression – “’Boer maak ‘n plan” – the farmer makes a plan. It usefully sums up the mood of optimism tinged with fatalism that is widespread in the South African wine community.

Today, South African winemakers are calling on wine lovers worldwide to mark Heritage Day (24th September) by showing their support for a national industry that is facing lasting damage from the pandemic.

For the last six months, wineries and distilleries, restaurants, retailers, hotels and taverns have been coping with one of severest lockdown regimes in the world. The transport and sale of alcohol was banned at the end of March; all exports were banned in April. The orders were lifted on 1 June and reinstated on 12 July and have now been rescinded.

From 21 September, the government has set the COVID-19 alert to Level 1. This allows alcohol sales from Monday to Friday only, with a curfew at 10pm.

21,000 job losses across wine and related industries are predicted (photo: Pierre van der Spuy)

There is relief that the rules are at least partially relaxed, but also worry for the future. The statistics are stark: the tens of thousands of predicted job losses are dwarfed by financial losses, not counting the millions lost in all the industries across South Africa that rely on wine.

Generic body Wines of South Africa estimates that as many as one-sixth of the country’s 533 producers will fail as a result of the pandemic. “The damage will be permanent,” Maryna Calow of WOSA told cluboenologique.com. “We anticipate direct job losses in excess of 21,000, from vineyard workers to senor management. We also estimate 80 wineries closing their doors and about 350 primary producers – growers – coming to a halt.”

WOSA conservatively estimates that the five-week ban on alcohol sales imposed during the lockdown period could have a direct export revenue loss of more than one billion Rand (£45.5m).

According to Vinpro, the non-profit company that represents more than 2,500 South African wine producers, while tourists are now allowed back into the country, billions will be lost in tourism revenue. It reckons the tourism industry to be worth R7.2bn annually, 94 per cent of which is in winery cellar door and hospitality activity.

Tbere has been a global outpouring of goodwill for beleagured wine nations like South Africa

But amid the pessimism, commentators are finding reasons to be positive. Export figures for July and August are healthy: August showed a 7 per cent increase year-on-year for bulk and bottled wine. The figures for July are up an impressive 58 per cent, although that huge increase was due to fulfilment of back orders due to the lifting of the export ban that month.

Wineries that already had a significant presence online for direct-to-consumer sales are cautiously upbeat. “Demand is significantly in excess of supply…2020 will be a record sales year. For this we are very grateful,” Mike Ratcliffe of Vilafonté told Club Oenologique.

The global outpouring of goodwill for beleagured wine nations like South Africa (Lebanon is another) from journalists exhorting people to get out and buy their wines has also helped trade.

“It’s created awareness for consumers who hadn’t drunk much South African wine to buy a few bottles, which is amazing,” Calow said. Similarly, the recent publication of Tim Atkin MW’s glowingly positive South Africa report, in which he says the country  is making “the best wines in its history” – is a fillip.

There is also considerable optimism about the 2021 harvest. The rainy season has been the best for several years, a welcome relief from the severe drought of the last two years. There is every indication that 2021 will produce fine wines in good quantity.

However, that brings its own problems: the industry estimates that there are 300m litres of unsold wine sitting in tanks across the country. “People who have wine sitting in their storage are going to be thinking about making room for that,” said Jim Clarke, US marketing manager for Wines of South Africa.

The farmer has a plan: Johann and Paul Krige at Kanonkop
There is considerable optimism about the 2021 harvest

So it is the worst of times, and the best of times. The great irony is that (as Atkin says) the industry has never been in better shape. “It’s frustrating,” Calow says. “We’re like a runner in the starting blocks waiting for the gun to go. We’ve got everything in place, we’re in tiptop condiition, and we can’t do what we want to do.”

South African farmers are a resilient breed though. Johann Krige at Kanonkop is clear this has been “a very bad time,” but he notes that every cloud has a silver lining: in the middle of lockdown the producer secured a listing with the major UK supermarket Tesco for its Kadette Cape Blend.

The veteran of many harvests, and many different crises, is phlegmatic. “In farming one has to buffer against natural disaster, whether wind or fire or epidemic,” he says on the phone from Stellenbosch. “We have to be properly geared up so we can ride it out.”