Wine industry confused after state backtracks on wine export ban

SA’s wine industry, a main economic driver contributing R38bn to the fiscus, has been left confused and frustrated after the government this week reversed an earlier decision to allow exports during the lockdown.

Last week, the government updated regulations to permit the transportation of wines and fresh produce through seaports and airports for export. The updated regulations meant the industry, which supports 300,000 jobs, would be allowed to export all finished wine, bottled and boxed.

However, new regulations issued this week after the initial 21-day lockdown was extended by two weeks state that transportation of alcohol is strictly prohibited for the duration of the lockdown, and only wine already at the ports will be cleared for export.

“The only alcohol that is allowed to be transported is that used for commercial purposes, namely sanitisers. Liquor that you drink is not allowed to be exported in the same way that it is not allowed to be sold,” co-operative governance and traditional affairs minister Nkosazana Dlamini-Zuma  said this week.

Wine industry body Vinpro had estimated that the cost of the ban on exports during the initial three-week lockdown would top R650m, while the industry also faced losing R800m in local sales. It said it would be meeting government officials on Friday to seek clarity on the latest regulations.

“We are not sure why the government made this announcement so suddenly and with no communication beforehand. We are in urgent meetings today to try to get answers and new information, and find a way forward for the industry through all of this,” said Vinpro managing director Rico Basson.

Wine is one of SA’s most valuable agri-processed products, yielding direct annual export income of more than R9bn, according to government data. The 100,000ha of vineyards, mostly in the Western Cape, account for 4% of world production.

Vinpro had warned last week that in addition to the immediate loss of revenue, an export ban would damage the industry’s reputation of consistent supply and compromise access to markets in the future.

The local industry could lose out to competitors such as the UK, Germany and the Netherlands.

While the sale of alcohol is banned during SA’s lockdown, bottle stores in most of Europe and the US are classified as essential-service providers and are allowed to trade. — BusinessLIVE

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