- The Southern African Agri Initiative and nine wine farms have taken the government to court to force the reopening of wine sales.
- Among others, they argue wine sales should be treated differently as they believe wine leads to fewer trauma cases.
- News24 spoke to one of the applicants about why he believes wine sales should be treated differently.
The Southern African Agri Initiative (Saai) and nine wine farms have taken the government to court to force the reopening of wine sales.
The sale of liquor, including wine, was banned again in July after the country saw a spike in coronavirus cases and to free up capacity in public hospitals.
Among others, Saai and the wine farms argued wine sales should be treated differently as wine played a smaller role in the abuse of liquor, and therefore an increase in trauma cases.
Their case is set to be heard on 18 August.
News24 spoke to one of the applicants, prominent wine farm Rust en Vrede owner Jean Engelbrecht, about the economic impact the ban has on his industry, why he believes table wine sales should be treated differently, and why wine prices will likely decline.
Why do you believe wine sales should be treated differently to other liquor sales?
We've learnt through this pandemic, is all producers of call it liquor were all placed into one basket, and we all have different goals. There is no way that the producers of table wine have the same goals than the producers of beer, or the producers of hard liquor. Definitely not. And we've seen that in our approach through organised agriculture, in our approach to the government. So that became a problem for people like us, which is mostly small, medium-sized businesses and we said: "Look we got to find a different way in addressing our issues as table wine already has different legislation and laws that regulated it." One of them being that we have licences to sell in grocers which hard liquor or beer does not have. And we think we need to continue to sell in grocers. We need to be able to sell at our wineries. We need to be able to sell online and without that we have no business and we have no business, there are no sales, there are no people. People don't want to go to a restaurant because they can't have a glass of wine.
If they want to put other regulations there, restrictive regulations, the supermarkets they could do the job successfully when they were allowed to sell essential or non-essential stuff you could buy a hammer but you couldn't buy a screwdriver or whatever or you could buy open shoes and not closed shoes. And supermarkets abided by those regulations successfully. And wine could even be easier.
And is that why you are taking the state to court?
So, you have to scientifically give us data why the ban on wine has led to the supposed oversaturation of emergency beds because we have in our court documents that three different studies that prove to the contrary.
The minister has not spoken to us, she has not spoken to organised agriculture, she has not spoken to the industry bodies. And we just need to be refocused and say: "Well, we're all on board on fighting Covid. I don't think anybody has an issue with that." But we also need to make decisions based on science and based on real data. And we need to look at what is happening with the people that have already lost their jobs, the other who is depended.
Hunger is already, I believe, already there. It's gonna become worse. And I think we all are in a situation when we say: "Look, we need to make this country work, we need to fight the Covid virus, we need to ensure that people have a means of earning a livelihood. They must do it in a way where they can get their self-respect back." And we cannot reach if we do not sit around the table. We have as agriculture to sit with the government around the table, we have not been able to achieve that and in our society, in a civilised society, the way in order to move forward is going through the courts.
And if you look at the beds available, it does seem that maybe the minister opted too quickly. And in one of the president's speeches, he said they will look at areas where the virus doesn't spread that quickly or where the numbers are contained, and they might open those areas and we support that. Right, we say, look at places where the virus is in a way where it is not overburdening any system. And let's open there.
What was the immediate impact of the liquor ban on Rust and Vrede's activities?
Well in the very beginning it had a harsh impact as no sales were allowed. And then there were those first couple of weeks when exports weren't allowed, restaurants closed. So the wine industry where we coming from as privately family-owned wineries, our business model consists of different links, of which exports are one, and restaurants at most wineries is another level. Sales to outside restaurants is a third level. Sales at grocers and then you have sales to private individuals.
At that very time, I think the entire country bought into the president's request that we stand together in this fight with Covid. And as far as I know, the industry that I'm in, everybody supported that as well. However, having said that, we did ask questions later on about the exports as it had no bearing on fighting the virus and the ports were operating and they were exporting other agricultural products but wine was not allowed.
So once, after a couple of weeks, they did allow it. They said: "But we can export, but we can only export wines that were ready for export before the lockdown started." Now that in itself created a problem, because normally wineries like us, we don't stack up exports for the year for various reasons. One being every country that you export to has its own statutory requirements for labels. So once you get an export order, then you will prepare that export order: put on the label that is required for that specific country - they're all different. They were not maybe ready for export orders. So, then they said we cannot bottle and we cannot label. So we were back at square one: you are allowed to but you can't.
Finally, there was some sanity and they said: "Fine, now we can prepare export orders." The second problem with that was to export you need an export certificate and you need certification seals for your wines. That can only be obtained from the Department of Agriculture and being a government body, the Department of Agriculture was closed. So yes, we could prepare the wine, we could not get export certificates. So you know the whole thing just had a domino effect.
And then finally when they opened the Department of Agriculture, we could export and get certification seals. There was that week that we could take wine to the ports and then closed it, said we can't transport wine. Which meant we were back to square one once again. During all this, you lose shelf space overseas because the customers overseas need to fill their shelves and they can't fill it with South African wine, they will pick another new producer which could be Australia, it could be Chile, Argentina. And once you lost shelf space, it is very difficult and a very tedious operation and time to get that shelf space back. Then I think it was on the 21 June, I can't remember, the president said some restaurants were open, but no liquor.
What has the impact been on jobs in your industry?
And the amount of people losing their jobs is horrific. On the wine farms, I mean we have in our restaurants now about 130 waiters and chefs and restaurant managers and sommeliers just in our medium business that hasn't got a job at the moment. The producers of bottles are struggling. I mean big large companies like Consol they struggled to keep their services open because of the cost and there's no requirement for bottles, because we don't have.
The people producing packaging, cartons, labels, capsules. They will struggle. So it's another domino effect. All through the value chain. I see the tourism industry said 500 000 jobs in the hotel and guesthouse sector. And on 20 June, the minister of tourism said that 30% of restaurants in South Africa have closed down permanently. I don't know what the figure is now.
How long do you think it would take the industry to return to normal?
There is definitely now already an oversupply just because of sales that's lost. I can't tell you, because that's in the part of the industry where I'm actually operating in, is to say how long it's gonna last. But what wine farmers will have to take, the decision to take in the next two months is whether they are going to let wine just run out, open the tanks as they call it, to make space for the vintage that is due in five months. That every guy has to answer for himself.
So the things just become bigger if it's not going to have a plan on how are we going to go forward? And that's why I say for me personally, if we could just sit around the table and you look at the facts and numbers and you can speak to the people in power and say: "Guys, let us see what can work, what cannot work which areas can be operating, how can we do it." It is not impossible, but it needs two parties around the table to sit, and we have not had that opportunity.
Do you assume wine prices decline the months ahead to kind of get rid of the oversupply in the market?
It's already declined. That time that we were allowed to sell wine, you know, online, and that we could do that we were allowed to sell it in grocery stores or liquor store. I mean there was not a winery that didn't cut prices just to make some income. And that trend will continue.