This archive report was first published on 21 June 2020.
As South Africa gradually eases its strict anti-coronavirus lockdown, the country's wine industry is facing a daunting challenge. The nine-week alcohol sales ban, which was lifted on June 1st, has left wineries around Cape Town fearing a prolonged hangover that could outlast the pandemic.
The ban, coupled with a six-week export freeze, has raised concerns among wine producers in the Western Cape province. According to Boyce Lloyd, CEO of KWV, the top wine and spirits producer in South Africa, the industry is facing a very real risk of being delisted by international buyers.
"We were the only country in the world where wine exports were not allowed," Lloyd said. "Buyers in key importing countries such as Canada, Finland, and Sweden removed bottles that did not meet a minimum sales rate. When you do not have stock on the shelf, obviously you can't record a sale, and then you get delisted. That is a very real risk we are facing."
Delays at ports due to coronavirus outbreaks among staff have exacerbated the risk of being delisted. The Western Cape is the hotspot of South Africa's epidemic, with more than half of the 92,681 cases. Cape Town harbour staffers have not been spared, with major hold-ups at harbour terminals reported.
"Only 55 percent of KWV wine exported this month had arrived on time, down from the usual 90 percent," Lloyd said. "Delays could be as long as three weeks."
The ongoing closure of South Africa's borders and lockdowns across the world have also made it difficult for wine producers to import packaging material. "I'm talking about cork from Portugal, glass from Europe," said Maryna Calow, a spokeswoman for Wines of South Africa. "There is a major delay and backlog there."
Meanwhile, cellars bursting with unsold wine barrels could cause a drop in bulk price due to oversupply by year-end. The combined effect could be devastating for South Africa's famed wine industry, which employs around 300,000 people.
"We are estimating around 18,000 jobs to be lost due to... bans on the sale of alcohol," Calow said. "80 percent of wine cellars risked shutting their doors in the long term."
