As the hospitality industry and alcohol producers battle to have the lockdown on the sale and distribution of alcohol lifted, many people have wondered what the long term effects will be on the world’s favourite beverage
The current state of the South African wine industry
One of South Africa’s greatest exports has been our wine, with locally produced brands ranking right up there with some of Europe’s best.
While South African’s can’t buy articles, one may question why wine producers don’t simply explore international markets. Cliff explains that it isn’t that easy to just export excess wine because the COVID-19 pandemic has caused changes in behaviour globally.
“Almost all producers are sitting with excess supply. It would be great for them to export but exporting has its issues. Hospitality globally is down so the demand for wine is down. It is not just a matter of “great we’ll just export this” … the producers must be extremely competitive in the current global situation to receive an export order,” says Cliff.
The financial impact of this turn of events, although crippling for most successful winemakers, could be fatal for the many winemakers who were struggling towards profitability before the lockdown.
What about the price of wine?
While many fear producers may increase prices to recoup lost profits, Cliff says it is unlikely. In fact, winemakers may stand to lose even more when the market is flooded with excess wine forcing them to drop prices.
“If the bulk of the surplus (mentioned above) is exported, then prices should remain as is. If not, I think a lot of these wines will flood the local market and lower the price of table wine. This is not good for the industry, but I cannot see much else as an alternative,” says Cliff.
While a drop in the price of wine might sound like a great thing for consumers, in the long run, it negatively impacts on our favourite winemakers and their operations leading to further job losses and financial strain.
2020 still has redeeming qualities
While 2020 may have been a bad year financially, socially, politically and devastating to global health, mother nature has been good to the farmers and when we can finally taste it, 2020 will be a good year indeed.
“There was a last-minute decision by the government to allow farmers to complete their harvest. The 2020 harvest looks to be a good one, with relatively good conditions in many of the grape growing regions. The Stellenbosch, Swartland, Cape South Coast, Paarl and Breedekloof regions all harvested a larger crop than in 2019, after being hit by the recent drought,” says Cliff.