Business Day Spotlight
PODCAST | Is the wine industry scraping the bottom of the barrel?
The sale of alcohol is banned during the Covid-19 lockdown, but wineries can still export their products
In this edition of Business Day Spotlight we take a closer look at the economic effect of the national lockdown and Covid-19 on the local wine industry.
Our host Mudiwa Gavaza is joined by Francois Bezuidenhout, a long-standing Cape Wine Master, winemaker, and spirits and wine marketing analyst to discuss the issues.
Join the discussion:
As part of the national lockdown, the government has taken a strong stance against the sale of alcohol, championed by police minister Bheki Cele. The ban has left many South Africans frustrated at not being able to buy their favourite tipple and resulted in looting of some liquor stores across the country.
But what has the situation meant for players in the wine industry, such as farmers, wineries and sales agents?
Having survived the knock of the recent drought, it’s a given that many producers have seen the ripple effects in their harvests, Bezuidenhout says. “Now, while production continues (SA farmers are considered an essential service and therefore exempt from the 21-day lockdown), trade is at a standstill, not giving further relief to the post-drought recovery.”
Bezuidenhout says the biggest worry at the moment is generating revenues. The industry understands that local sales are not feasible during this time and have opted to look for opportunities elsewhere. Some wineries are now focused on producing alcohol used in the production of sanitising products, which are in high demand because of Covid-19.
Additionally, winemakers are looking to international markets to sell their products. The SA wine industry has received permission to export its products, following intensive lobbying of the government by an an industry exporters task-team.
On Tuesday, the minister of transport gazetted new directives under the lockdown regulations to expressly permit the export of wine and other fresh produce.
Bezuidenhout says export markets are particularly attractive at the moment for local winemakers as weakness in the rand, which has breached R19/$, means producers are able to receive more money in rand for their products.
The discussion also explores the possible effects of Covid-19 on the whole wine value chain, while looking at parallels with other types of business, advice on how to stay calm during this period, and the possible recovery that may come when consumers are allowed to make purchases freely again.
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