This archive report was first published on 22 June 2020.
South Africa's wine industry is facing a daunting challenge as the country's nine-week alcohol sales ban and six-week export freeze come to an end. The ban, which was lifted on June 1st, was part of a gradual easing of confinement measures to limit the economic setbacks of the pandemic.
Wine producers in the Western Cape province are worried that the industry will struggle to bounce back. The alcohol sales ban was coupled with a six-week export freeze, raising concerns that buyers could turn to suppliers in other countries if demand abroad was not rapidly met.
"We were the only country in the world where wine exports were not allowed," said Boyce Lloyd, CEO of South African top wine and spirits producer KWV. "When you do not have stock on the shelf obviously you can't record a sale and then you get delisted," he added.
International buyers have grown nervous about "putting all their eggs in one basket" and are now looking at importing other countries' wines in case there is a problem again. The risk of being delisted has been exacerbated by delays at ports due to coronavirus outbreaks among staff.
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 and a 50 percent capacity. Only 55 percent of KWV wine exported this month had arrived on time, down from the usual 90 percent.
Delays could be as long as three weeks, and 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 non-profit that promotes wine exports. "There is a major delay and backlog there."
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, adding that at least 80 wine cellars in the area risked shutting their doors in the long term.
