SA’s wine industry, a main economic driver contributing R38bn to the fiscus, is confused and frustrated after the government reversed a decision to allow exports during the lockdown period.
Earlier in April the government updated regulations to permit the transport of wines and fresh produce through seaports and airports for export. The updated regulations meant that the industry, which supports 300,000 jobs, would be allowed to export all finished wine — bottled and boxed.
However, regulations issued last week, after the initial 21-day lockdown period meant to contain the spread of the coronavirus was extended by two weeks, state that the transport of alcohol is strictly prohibited for the duration of the lockdown and only wine already at ports will be cleared for export.
“The only alcohol that is allowed to be transported is that used for commercial purposes — sanitisers. Liquor that you drink is not allowed to be exported in the same way that it is not allowed to be sold,” co-operative governance & traditional affairs minister Nkosazana Dlamini-Zuma said.
Wine industry body Vinpro had estimated that the cost of the ban on exports during the initial three-week lockdown would top R650m, while the industry also faced losing R800m in local sales. It said it would be meeting government officials soon to seek clarity on the latest regulations.
“We are not sure why the government made this announcement so suddenly and with no communication beforehand, but we are in urgent meetings to try to get answers, new information and find a way forward for the industry through all of this,” said Vinpro MD Rico Basson.
Vinpro said the wine industry has had a roller-coaster ride over the past three weeks which will severely affect exports and the broader industry, while local sales are still banned in the next two weeks.
“Like many other sectors, the Covid-19 pandemic and lockdown deeply affects the SA wine industry — from primary production to processing, related services and products, and especially wine tourism. The financial impact on our industry will undoubtedly also pass on to the approximately 300,000 people employed by the wine industry value chain, as well as their communities.”
Wine is one of SA’s most valuable agri-processed products, yielding direct annual export income of more than R9bn, according to government data. The 100,000ha of vineyards, mostly in the Western Cape, account for 4% of world production.
Vinpro warned last week that in addition to the immediate loss of revenue, an export ban would damage the industry’s reputation of consistent supply and compromise access to markets in the future. The local industry could lose out to competitors such as the UK, Germany and the Netherlands. While the sale of alcohol is banned during SA’s 21-day lockdown, bottle stores in most of Europe and the US are classified as essential service providers and are allowed to trade.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.