Coronavirus already hitting wine trade, warns industry body

(Source: Seeff)
(Source: Seeff)

Time will tell the full extent of the impact of seaports and land ports closures on South Africa's wine industry, but its already not looking good, according to Wines of South Africa.

Speaking to Fin24 by phone on Monday, spokesperson of WOSA Maryna Calow, who is in self-quarantine after travelling to Europe, said that the local wine industry was already taking a knock following the cancellation of an international trade show and the closure of China's ports.

WOSA represents about 550 local exporting wine producers.

According to Calow, the ratio of exports to local consumption is 50:50 but this could change due to the impact of coronavirus on trade.

President Cyril Ramaphosa on Sunday declared a national disaster due to the coronavirus outbreak. A travel ban has been instituted and 35 land ports and two sea ports will be closed with effect from Monday 16 March, 2020. These closures are not related to cargo, but apply to the movement of people. 

'Big blow'

However, there could still be delays in offloading cargo from active ports due to having less available labour, according to Tralac Trade Law Centre researcher Willemien Viljoen. This was seen when China restricted the movement of people, as there had been container ships waiting in harbours, delaying the delivery of goods. 

Calow told Fin24 that while the wine industry would only be able to tell the full implications of virus-related complications in the long run. However, she said, the short-term impact of some restrictions had already been felt.

"One thing we all know for sure is, as we speak, we were supposed to be in Germany for probably what is known as one of the biggest wine trade fairs … and that has been cancelled. That is already in itself a big blow for our industry because you lose an important platform for our producers to meet existing and potential, new buyers, agents and importers," she said.

Wine can't be sent out

Calow said that the closure of China's ports definitely weighed down on the export figures for January and February.

"We are quite sure that the rest of the world is to follow suit in terms of closing ports of entry. It will mean that our wine can't be sent out," she said. Calow expects the wine industry to be able to quantify the overall impact of this within the next three or four months.

"I suspect we will see a lot of orders being cancelled, due to the challenges and difficulties of getting products out of South Africa," she said.

When asked if Cape-based businesses would be using alternative ports seeing as the Mossel Bay and Saldanha Bay ports have been closed, Calow said it depends on each business on what contingency measures to put in place.

"It depends on each individual business, where their agents are located, how they operate, where they send their shippings across. They all work on such different bases with their agents. So it is difficult to know how they will go about to circumvent any inopportune situation that there may be," she said.

Individual businesses are also putting measures in place to prevent the spread of the virus at their operations, Calow added.

Isolation 

Family owned-wine estate Delheim Estate on Monday issued a statement indicating that it would close the hospitality division of its business for the next two weeks after one of its guests, part of a Dutch tour group, had tested positively for Covid-19. "As five members of our team have been in contact with this group, we have decided to implement self-isolation for these individuals," the statement read. 

Calow said that producers will probably take different approaches in mitigating the effects of the crisis. "I would like to think that our industry is responsible and that their (businesses) approach will be a responsible approach, without fueling hysteria but ensuring safety of staff," she said.

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