South Africa’s wine export ban has been lifted a second time, but the changing situation has led to disruptions and a possible loss of revenue of around R1 billion.
The South African wine industry has been on a kind of traumatic roller coaster lately.
An initial ban on wine exports was announced on March 25 and went into effect at midnight on April 26. This was lifted on April 7, only to be reinstated on April 16.
On April 29, the South African government decided to lift the transport restrictions once again as the country moves from level 5 to level 4 blocking restrictions as a result of Covid-19. South African wine exports can now resume from Friday, May 1.
Wines of South Africa previously released an estimate that a five-week export ban could result in a direct loss of export earnings of more than R1 billion (£ 44 million, FOB value). He warned that the damage to “reputation and constant supply, as well as future market opportunities, could be astronomical in the long term with the loss of listings for many South African wines in the retail environment.”
While the ban did not last the full five weeks, the nature of stopping the start of exports has resulted in “the estimate of around R1 billion still being largely correct,” said Jo Wehring, UK market manager. United for Wines of South Africa. the beverage business.
Wehring explained: “Although there was a brief period when exports were able to resume during the five-week shutdown, very little was exported as the port was operating at around 25% capacity. We hope that with the wine able to move again, the industry will eventually catch up.
“There has already been a lot of support for South Africa from importers and retailers altering plans to ensure that wines remain on the shelves. Now we hope to get back on track as quickly as possible. ”
Starting on May 1, the transportation and export of wine in South Africa, as well as manufacturing and related services, can be resumed, Minister Dr. Nkosazana Dlamini Zuma announced at a press conference last night.
The industry’s export task team has interpreted the government’s guidance to mean that the wine industry can now perform essential procurement and manufacturing (including bottling, labeling, and packaging) under strict health and safety protocols.
Producers can now transport wine to ports and airports, and also transport wine to neighboring countries by road.
Commenting on the announcement, Siobhan Thompson, CEO of Wines of South Africa, said: “We are grateful to President Ramaphosa and relevant government departments for confirmation and security, and as such we strive to be responsible in our actions and messages. to guarantee the safety of our people.
“As an industry, we remain fully committed to implementing a security protocol, which will effectively address transmission risks throughout our value chain. The safety of our workforce, customers and consumers is of utmost importance to our industry. ”
South African producers must now ensure that staff wear face masks and observe social and physical estrangement during the transport of wine, as well as in the workplace. Hand washing should be done throughout the day and disinfectants should be available and applied correctly.
Work areas, including door handles and shared facilities, should be cleaned regularly. If a staff member is confirmed to be infected, companies must follow quarantine regulations.
After lobbying Vinpro and SALBA in March, winemaking work was deemed essential and winemakers were allowed to finish the 2020 harvest and work in their warehouses.
Initial OIV data on the 2020 harvest in the southern hemisphere suggests that South Africa is one of two countries that has not experienced a decrease in volume this year.
It is expected to generate a total of 10.2mhl, 5% more than in 2019, which was recognized as a small harvest. Wines of South Africa notes that volumes are, however, even smaller than the five-year average of 1.36 million tonnes.