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by Cassie du Plessis
Right: It's great when a plan comes together. Toasting the milestone at Plaisir de Merle, l t r Riaan Kruger (CWSI), Hermann Böhmer (Stellenbosch Vineyards), Theo Pegel (VinPro SA), Nosey Pieterse (Bawsi), Jan Booysen (Winetech) and Prof Stephanus Loubser (US).
The
proposals for a formal representative structure for the South African
wine industry were unanimously accepted at a meeting of all
stakeholders in the South African wine industry – probably the
widest possible representation ever rallied to discuss industry
business. The
fact is, every organisation that counts in this regard had to be
there. This was more than business; it was a meeting to set the
course of the wine industry – brandy and grape juice concentrate
included – irrevocably on a new path of co-operation and change
that will affect each and everyone connected with it. Actually,
when the 40 odd attendees left the meeting hall at Plaisir de Merle
wine farm near Simondium to toast this milestone outside in the
garden on a scorching summer’s afternoon, there was initially a
kind of stunned atmosphere of disbelief. One felt that this had been
the most important decision in the history of the industry since the
formation of KWV in 1918. The
meeting was the first step in the formation of the South African Wine
and Brandy Company – the provisional name of this Section 21
company intended to drive the unified efforts of the industry in
future in accordance with the Vision 2020 recommendations. The
next step is that three “facilitators” representing
different sectors of the industry will now meet and agree on a
strategy through which to establish a relevant forum to have
representatives nominated for each direct stakeholder group. The
representatives of each chamber are to be nominated before the end of
May. They will constitute a Board, which will in turn form an
executive committee and appoint a chief executive officer by June
this year. The
facilitators, nominated after a short break for lobbying, are: • Labour:
Nosey Pieterse of Bawsi • Wine
grape growers/wineries: Theo Pegel of VinPro (SA) • Wholesale
merchants: Riaan Kruger of the Cape Wine and Spirit Institute. An
industry committee comprising Pieterse, Pegel and Kruger, with
Hermann Böhmer of Stellenbosch Vineyards, was appointed in
November to thrash out the proposal. The
meeting at Plaisir de Merle was chaired by Jan Scannell, MD of
Distell, who has played a key role in getting the Vision 2020
proposals implemented following its acceptance by Winetech at the
beginning of last year. With him in the initial pilot committee were
Lourens Jonker, KWV chairman, and Mr Böhmer. Progress
was initially slow, causing concern among industry leaders, and in
particular also with the consultant and facilitator of the original
R1,5 million study, Professor Philip Spies. The delay had to do
mainly with getting the vitally necessary support from government,
who in turn wanted to be sure that labour in the wine industry was
properly consulted and represented in the process. Well,
all fears about government and labour support were dispelled at this
meeting, where both the Department of Labour and several workers’
representatives showed a strong and active presence, with Bawsi (the
Black Association of the Wine and Spirit Industry) in the leading
role. Professor
Stephanus Loubser, associate director of the University of
Stellenbosch’s Business School – thus from an independent
position – presented the proposal for the new representative
structure.
He
reported that in addition to the Vision 2020 recommendations, the
view of key opinion leaders in the industry had been considered.
Finer details of the structures and strategies of individual
organisational elements would be worked out once the overall industry
structure had been finalised and accepted. For
purposes of the proposal, the term “wine industry” was used
to indicate the “broader industry”, embracing brandy and
grape concentrate, while “direct stakeholders” included
farm workers and farm worker communities, labour, wine grape growers,
wineries and wholesale merchants. The industry committee also decided
that “an effective representative system needs to have the
authority to negotiate and speak for the whole industry, not just for
producers or trade, as well as the capability to approach
negotiations from a global and strategic point of view. This Vision
2020 recommendation is in fact fundamental to the successful
achievement of most of their other industry recommendations”. The
following principles, it was decided, are fundamental to the success
of a formal representative structure for the wine industry. • All
role players (or stakeholders) will be involved, either directly or
indirectly. • Direct
stakeholders include wine grape growers, wineries, merchants and
labour. • Indirect
stakeholders include Government, NGOs, trade and industry, health
bodies, financial institutions, research institutions, educational
institutions, Sawit, retailers, etc. • The
structure will be responsible for achieving synergy among the various
industry processes that need to be integrated for maximum results.
These processes include marketing technical research, human resource
development, intelligence, and social and environmental aspects. • This
structure is based on a clean-slate principle but complies with
current legal requirements. The
new Board’s function will be to ensure that the South African
Wine and Brandy Company achieves its overall vision, goals and
objectives in an integrated cost-effective manner. It will consist of
non-executive board members including a chairperson who, it is
strongly recommended, will at least for the first two-year term, be
from outside the direct stakeholder groupings. Each direct
stakeholder category decides on its own, according to its own
methodology, whom it wants to nominate for the Board. The
stakeholders are free to associate and register with any of the these
groupings, but not with more than one and they will be expected to
represent primarily the interests of the wine industry and not those
of their specific affiliations. Decision-making will be based on
consensus as far as possible. The
funding of the Board and its small office – expected to amount
to about R1,5 million in the first year – will be carried by all
groups represented on an equal basis. However, for the first 10 years
labour will be exempted from making a contribution. The
Chief Executive Officer will be responsible for the effective
functioning of the company in line with the directions set by the
Board. Although not a Board Director, the CEO will attend Board
meetings. “In addition to his/her overall management
responsibility, the CEO is also responsible for establishing and
creating a positive image of the wine industry; and to communicate
effectively to all stakeholder groupings. The CEO will also have a
small office reporting to him/her, with responsibility for the
overall administration and financial function of the company.” Five
business units will report to the CEO, with each unit headed by a
manager, appointed by the Board and CEO, on a full-time basis. There
will be units to co-ordinate marketing, technical research, human
resource development, industry intelligence and social and economic
empowerment. The units will draw together the functions of existing
organisations, for instance marketing will probably embrace domestic
and international generic marketing of South African wine, brandy and
grape concentrate – thus, functions performed by existing bodies
such as the Wine Foundation, Cape Wine Academy, Wines of South Africa
(Wosa), the Brandy Foundation and Cape Wine and Spirit Educational
Trust. “These
units will form a safety net to catch all those functions which do
not have their own structures,” said Professor Loubser. It
was agreed that the proposed structure should not adversely affect
the continued payment of the current levies or continued access to
the funds from the SA Wine Industry Trust. The continued tax-exempted
status of the various industry organisations should also be ensured.
Some of these programmes could be financed by the EU money made
available to the wine industry. Prof
Loubser said, “we’re not redesigning the
industry, we’re redesigning its future. We’re restructuring
it in a different frame of reference to work in the same direction
and utilise our resources to the maximum. “The
fact that we started on a clear slate principle does not mean we’re
going to ignore everything that’s in place. Let’s first put
the essentials in place and then let the stakeholders take it
further.” At
the conclusion of the meeting, Jerry Tube, assistant-director:
economic research analyses of the National Department of Agriculture,
summed up the spirit of co-operation by ensuring those present of the
government’s support and recognition in the proposed process and
structure. “It’s not a question of whether government will
support it; if the structure works, government has to recognise it,”
he said.
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