SA’s wine tourism industry, which supports almost 36,000 jobs, lost more than R2.5bn in revenue between March and July, mainly because of the Covid-19-induced national lockdown.
Wine tourism contributed R7.2bn to GDP in 2019. This includes direct expenditure of visitors at wine farms, indirect expenditure of goods bought by wineries from other local businesses to deliver the tourism service, as well as expenditure by the wineries’ employees at shops.
Before Covid-19 struck, wine tourism was growing fast, especially in the Western Cape, the hub of SA’s wine industry. Tourists were visiting vineyards, wineries, festivals and shows in large numbers to taste local wines and learn about the winemaking process. The biggest generator of tourism revenue at winery level is, however, wine tastings and sales that take place at the cellar door.
But the lockdown, including the first alcohol ban and the most recent restrictions on liquor sales, has seen visitor numbers dry up. The liquor industry, which contributes 3% to SA’s GDP and is responsible for 1-million jobs, was left reeling in July when the government announced an immediate ban on alcohol, arguing that the move would reduce the alcohol-related trauma load on hospitals and free up desperately needed resources for Covid-19 patients.
A group of Cape wine farmers, associations and the Southern African Agri Initiative (Saai), an organisation that seeks to protect the rights and interests of farmers, have launched an urgent court bid to have the liquor ban, specifically on wine, lifted.
At the weekend, scientists advising the government suggested the ban on alcohol sales be lifted as it had achieved its objective.
“My recommendation to government is to be nimble. We have achieved [a reduction on the impact on the health-care system] by having a curfew and prohibition on alcohol,” said SA Medical Research Council (SAMRC) president and CEO Glenda Gray, a member of the ministerial advisory council advising health minister Zweli Mkhize on the Covid-19 response.
According to wine producers body Vinpro, restricted trading hours, the specific exclusion of on-site consumption of alcohol and the ban on domestic overnight leisure travel (intra- and interprovincial) and supporting services such as accommodation and air travel have had an adverse effect on wine tourism.
“We estimate that wine tourism has lost more than R2.5bn in revenue between March and July 2020, with the majority of these losses incurred at the tasting room. This will inadvertently have a severe effect on profitability, employment and the financial stability of the communities that are dependent on this sector,” said Marisah Nieuwoudt, Vinpro wine tourism manager.
Vinpro estimates that the entire wine industry, which consists of 2,778 wine grape producers and 533 wineries, could lose more than 80 wineries, 350 wine grape producers and 18,000 jobs over the next 18 months due to the previous and current bans on exports and local wine sales. This scenario could worsen should the ban continue past the current level 3 restrictions.
Close to 88% of the total wine tourism revenue comes from wine tasting, overnight accommodation, food and beverage and conferences and events, with variation between regions.
“We welcome the announcement made on July 30 2020 by the minister of tourism, Mmamoloko Kubayi-Ngubane, that restrictions relating to personal movement would be relaxed to allow for domestic overnight leisure travel within province of residence. Our wineries’ accommodation offering accounts for 25% of their total tourism turnover and this is strongly driven by leisure farm stays,” Nieuwoudt said.
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