Covid is challenging for most countries' wine industries, but South Africa has to fight its own government as well.
To pick, or not to pick, that is the question.
Under normal circumstances, South Africa's winemakers would be celebrating a mercifully uneventful growing season. After years of crippling drought, winter 2020 saw rainfall levels return to normal, with dams full and expectations high.
"Flowering appeared to be uniform and unaffected by any radical weather spikes. Veraison has been steady, relatively compact and first signs are that there is a healthy 2021 crop out there in the vineyards," says Mike Ratcliffe, managing partner at Vilafonté winery in Stellenbosch.
Yet the talk in South Africa at the moment isn't about vintage quality, it's about global inventory levels and selling off premium Chardonnay for fruit juice (Passi Granor is the local favorite). In December, South Africa's president Cyril Ramaphosa announced a third domestic ban on sales of alcohol in the nation. This wasn't so much a kick in the teeth for South Africa's struggling wine industry, as a machete in the rib cage.
According to wine organization Vinpro, the industry now has more than 640 million liters of wine in stock (65 percent of a normal harvest). So there is simply insufficient cellar space to accommodate the expected yields in 2021. This forces impossible choices: should companies dispose of existing inventories, or abandon a large percentage of the harvest?
"These excess stocks will have to go into industrial wine and distillate," agrees Tim Hutchinson, executive chairman at DGB.
"A number of the big production cellars have planned to use a significant percentage of their production for grape concentrate destined for the fruit juice industry, which hopefully reduces the size of the problem."
But the ban doesn't just affect producers. Ramaphosa's policy has had a devastating impact on all sectors of the hospitality and wine trade. Optimism is a scant commodity among sommeliers and restaurant managers.
"It's very hard to remain upbeat at this stage; restaurants that normally depend on alcohol sales are closing left and right. We don’t have space for the incoming harvest, and people are trying to sell off their wines, stating 'make me an offer'," says sommelier and judge Erica Taylor.
"All of the relief funds have been squandered by the government and we even having to get vaccines donated to us from India – I lived in India for six years, so that is not an insult to India. Farms are offering huge discounts for 'buy now, drink later' campaigns, but that is also problematic. Sommeliers are finding their careers in tatters."
If the presidency could provide a definitive timetable for lifting – at least partially – the ban on alcohol sales, that would perhaps offer a scant mercy. Unfortunately, their response to the Covid-19 crisis mirrors the British government's guiding philosophy – make it up as you go along. The ban was initially supposed to be lifted in January – the current date is February 15.
"The problem is that the last two prohibitions were continually extended, so there is no real end," says Taylor. "We have no idea how long it will last."
A changing landscape
South Africa is unique among New World wine nations for several reasons. Sadly, few of these relate to the quality of its output. The wine industry was controlled for decades by the KWV, a co-operative that was founded in 1918 with the aim of providing a market and controlling the prices for everything made in the Western Cape. They also operated a strict quota system until 1992, which stifled attempts of wineries to explore their sub-regions and experiment with new vine plantings.
However, those days are thankfully gone. Both national and global investment has poured in since the dark days of apartheid; top South African labels are equal to California's best. Even at the super-premium end, the bang-for-your-buck ratio is unprecedented. But the Cape's wineries face a constant battle against a hostile – or at best apathetic – political class. It's hard to imagine such struggles in Barossa Valley, Mendoza or Marlborough.
There has been bellicose rhetoric about "land reform" for years; the ban is just the latest in a series of government measures seemingly designed to cripple the industry. And it's no accident, say insiders.
"There is unfortunately an anti-alcohol lobby in the ruling party who have the president's ear – the tragedy is that we already have an unemployment crisis and this will further compound the problem, besides forcing many producers, retailers and restaurants out of business," says Tim Hutchinson.
"The industry accept there are challenges around alcohol abuse in certain communities and we are willing to work with the government on the many responsible consumption initiatives we already have in place. Yet there is not a willingness from government to engage with industry leaders during the crisis."
But South Africa's wine community is not alone. The SaveSAwine online campaign has received an excellent response, highlighting how many friends and supporters the industry has. Wine exports performed above expectations in 2020, despite the constant turbulence and government U-turns. Direct-to-consumer sales also continue to provide some consolation.
"On a personal note, my winery Vilafonté has a strong direct-to-consumer focus at the very high-end and we have seen a dramatic and compelling increase in uptake on e-commerce," says Ratcliffe.
"This has a very positive impact on margins and is a trend that I think is here to stay. The super-premium segment showed growth of 37 percent in volume, which is a remarkable result, and reinforced the massive growth at the top end of the South African wine industry.”
Can the global marketplace absorb all of South-Africa's unsold wine? Not a chance, although the growing popularity of premium Cape wine is a cause for hope. Nevertheless, the industry is fighting back on all fronts, having recently served papers on the president of the Republic of South Africa, to seek compensation for their losses.
"Failing a satisfactory response, we will approach the Pretoria High Court for urgent relief," says Ratcliffe.
"The good news is that as a result of an earlier case, we remain on the court roll, which will mean a quick response."
We can only hope that South-Africa's judiciary show more common sense than their elected peers.
January 27, 2021 at 05:04AM
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The Final Insult for South African Wine | Wine-Searcher News & Features - Wine-Searcher
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