The South African Wine Industry

The South African Wine Industry is in Crisis

Hey New World Wine Warriors, we’re back at it with another blog – aren’t we on a roll? This one is more fact heavy, so maybe pour yourself a glass of wine, or just bring the bottle and pop your feet up. We’ll be looking at the South African wine industry regions that are currently going through a bit of bother.

Covid-19 Affect on South African Wine Industry’s Regions

As we all know, COVID-19 has taken the world by storm and practically shut down the hospitality industry: travel plans and everything for the past 6 months and onwards. Many South African wine regions are struggling with this pandemic, due to President Ramaphosa inflicting an early ban on all alcohol sales. South African wine regions bring in around 500 million dollars a year from exporting wine internationally and locally. Their restrictions look as though they are to be the harshest the world’s seen. This included a block on ALL wine sales in and out of the country, and although local wine producers across the Cape understood the direct measures taken, there was still an evident fear of the impact on both revenue and jobs.

But what does this mean for the South African wine industry?

Being the only wine producing company that has completely stopped any domestic sales, it is evident that this pandemic would take its toll on the economy. The industry alone employs around 300,000 people and in turn will cause the closure of 18,000 jobs, nearly 80 wineries and 350 wine grape producers in the next year.

2020 South African Wine Vintage

Fortunately for us wine lovers, President Ramaphosa allowed producers to harvest their 2020 vintage. However, the export portals which opened in May, then closed again just over a month later. The reason for this? Ramaphosa said there was clear evidence that the resumption of alcohol sales has resulted in substantial pressure on hospitals. This was including trauma and ICU units.

‘It is vital that we do not burden our clinics and hospitals with alcohol-related injuries. Especially if that could have been avoided’ President Ramaphosa.

South African Wine Region Producers

This left producers with mountains of unsellable stock. We reached out to Mitch Craven, co-owner of Craven Wines. Mitch explained how he has been directly affected.

‘We are still allowed to export which is enabling us to keep trucking on and moving wine. But the deeply concerning issue for us is the effect this is having our beloved hospitality industry. An industry we not only adore as we enjoy food, but an industry that is critical to our business through the sale of our wines. Many of us smaller brands are much more on-trade reliant. While we had a brief reprieve of a month or so to sell wine again, the restaurants were not allowed to sell liquor on-trade. Which, for anyone that knows is a vast majority of their profit.’

When I asked him about his concerns going forward, he simply replied. ‘We are very concerned about what state the industry will be in after this all settles down and the amount of jobs lost due to it all. Wine is a wonderful product which is a part of so many other industries from farming, to packaging, to tourism, the list goes on. This will effect a large part of these industries.’

The silver lining for these South African regions

Despite such a horrible situation, we at Specialist Cellars are SO thankful for the hospitality industry coming together to support small businesses. It is at times like these that we can appreciate our customers and loyal wine warriors. Mitch described it perfectly: ‘the wine industry here is a very resilient bunch and we will carry on.’

Speaking to Kerrylea Alborough, wine maker at Cavalli Estate

Kerrylea describes the changes in her day-to-day life: ‘Most farms are running on short time and have had to reduce the number of staff employed. Minimum wage earners losing their employment on farms. And many Farmers are thinking of different farming techniques and practices in order to save and survive this period’. 

‘With the reduction in sales for this year, there will be less demand for grapes next year. Many of the producers will have a larger grape production than demand leading to grapes left on their vines if there are not new buyers.’

‘The entire value chain is being affected from the farmer and farm workers right through to glass bottle manufacturers, marketers, international sales and restaurants. I think this will affect South Africa’s entire economy as they already estimate billions of Rands lost just in this short time.’

What can we do to help?

You’re probably wondering: ‘Well Sarah, what’s the point in you telling me all this when I’m at home in the UK’. But you can help. This week, we are honing in on all of our South African producers: Craven, Kraal Bay, Mullineux, Crystallum, Gabrielskloof and a new sneaky appearance from Thorne & Daughters. Simply follow our Instagram here to check it out. 

The offer from us at Specialist Cellars?

Pick and mix any 6 bottles from our South African collection and we’ll instantly give you 15% off. If you’re struggling with what to buy, then we’ve created a mixed case that features all of our best sellers. Shop it here.

*Offer expires Sunday 26th July MIDNIGHT*