The country has moved to lockdown Level 2 on Tuesday, August 18 and residents rejoiced as inter-provincial travel opened and alcohol and cigarette sales are permitted once again.
Experts are concerned though, that it might already be too late for many stakeholders in the wine industry. Hein Koegelenberg, CEO of La Motte and Leopard’s Leap told Retailing Africa that experts in the sector predict up to 30 wine cellars and 350 wine producers will not be able to survive.
Experts say many wineries are already facing dire financial situations.
‘Industry projections are that we have 300 million litres over supply. Many estates have an oversupply worth two vintages of value-added product. As an industry, we will have to be very strategic to make the best of the stock situation. When it comes to employment, projections are for 21,000 job losses across the total value chain of the wine industry,’ Koegelenberg added.
On his blog, Hein on wine, Koegelenberg wrote: ‘Wine is about much more than the current vintage. It is all about long term planning. Seven year forecasts are necessary when vineyards have to be planted and at least three year budgets are required for when we decide on winemaking volumes. The current crisis might have us skip a vintage because we are not selling according to what has been budgeted.
‘The over-supply obviously drives down prices and there is no way to recover the value of value-added stock such as barrel-matured red wines. This sees us not only losing job opportunities during pruning, harvesting and pressing, but will also affect the niche industry players with small volumes, the treasured older vineyards and wineries focusing on cellar door sales.’
He added that the only way to move forward is through partnerships and industries supporting each other, saying that he has been moved by the public’s support for the industry through campaigns such as SaveSAWine and MoveOneMillion.
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