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PREVIOUS WINELAND ARTICLES   |   WINELAND HOME We need a united front ... for the dilemmas of the next decade - Michael Fridjhon by Hymli Krige Spring arrived early and ambitious for Sasev members this year. A forum meeting in August welcomed a range of speakers that included Tim Rands from Vinimark, Nigel Cattermole from Siris Vintners and Caroline Rillema from Caroline's specialist wine shops. The highlight for most of the nearly 200 strong audience was, however, the chance to listen to Michael Fridjhon, outspoken and often controversial wine industry commentator and critic. Most people brandish their swords at Australia and Chile when they talk about South Africa's main competitors in wine. In his recent address at the Savev (Society for Enology and Vitculture) spring gathering, Michael Fridjhon hoisted a new flag, warning attendees about the Iberian giant. "Spain could increase its production threefold in the next three to five years," he argued. New regulations that allow irrigation in the La Mancha region (the arid and expansive heartland of inexpensive white Spanish wines) as well as the trend towards planting of popular varietals could result in this single demarcated wine region producing at least six times South Africa's current production of wine. If ever a surplus was looming ... In his ever realistic and uncompromising way, Fridjhon exposed several of South Africa's current weaknesses. He stated that the industry had rectified much of its plant material problems, but had been over-reacting in several respects. The varietal correction in favour of red wines had been at the expense of whites, particularly Chardonnay - despite the fact the Chardonnay sells well in high price categories. Producers, according to Fridjhon, are also still planting the wrong varietals in the wrong places. "There are wines in the pipeline at uneconomical prices. Processors will look at growers to recompense their losses" A favourable currency and the "Mandela effect" had bred an "unbusinesslike" state in the industry over the past decade. Inefficiencies had been concealed, and are still being concealed. "The prices paid for the 2004 vintage show price stability. Buyers are not feeling threatened. They do not believe that they are standing on the edge of a cliff," he pointed out. "There are wines in the pipeline at uneconomical prices. Processors will look at growers to recompense their losses", he warned. Yes, we have to look at the future with trepidation, listening to such dark realities. But, Michael Fridjhon was also ready to remind producers and winemakers of their South African advantage: we are relatively close to our main market, the European Union (although there is an increasing shortage of shipping capacity to consider) and we have trade agreements that can be very beneficial. Talking about the dilemmas of the next decade, he highlighted the following: Authoritarianism vs anarchism Enology vs viticulture Export vs domestic market Agent vs victim Presence vs premium Unity vs division Authoritarianism vs anarchism Admittedly, many members of the audience were waiting for Fridjhon to have a stab at what is perceived as the "old guard" in the wine industry. Although he played his card, claiming that the industry was driven by dinosaurs, Fridjhon also agreed that they had provided a much needed capital base for the industry. "Cut-throat commercialism," however, is foreign to them. This dilemma has been created by the industry itself, Fridjhon believes. "We have all empowered them. It is all too easy to assume that they will take the lead ... It is an abdication of decision-making that affects how the industry competes and what its image is." He encouraged the individual in the industry to assume responsibility, to manage and participate on industry level. Enology vs viticulture Traditionally, winemakers were perceived as the white-collar workers and viticulturists as the blue-collar workers in the industry. Not surprisingly, therefore, the winemakers were the ones to be paid more, and who represented the industry. "We have been paying lip service to the idea that wine is made in the vineyard," Fridjhon said. This has to be addressed on all levels of the industry - from the farm to the wine shows and public forums. Export vs domestic market In the export market - Fridjhon hardly had to remind wine producers - we are effectively running below cost. Many people are looking at the domestic market to subsidise costs. Imports are becoming a competitive choice for the trade. The local market, according to Fridjhon, could grow, but it will be too slow. He identified the Ministry of Health's prohibitionism as a potential danger to the industry's growth. We must defend our territory, he emphasised. A very valid question, was about the investment proportions made towards promotion and advertising in the international markets vs South Africa. "Are you spending the same money in Gauteng that you are spending in London?" The retail is resentful after they have been ignored for the past five years - nevertheless, the opportunities to work together to grow the market are there, and should be nurtured. Fridjhon also warned producers not to subsidise their exports from sales in the local market. This will again conceal inefficiencies. Agent vs victim There has not been a commensurate fall in price in imported equipment as there has been a fall in income from sales. This is a clear indication that local producers are accepting poor quality and higher prices for barrels and corks, for example. This issue created a lively debate afterwards, as producers are frustrated and unsure about the way to combat these prices. Fridjhon maintains that it is a mindset - the industry regards itself as a victim and acts accordingly. He encouraged producers to deal with such matters as units, and to be proactive about such negotiations. Presence vs premium Michael Fridjhon quoted Australia's Brian Crozier in his argument that Australia is increasingly being perceived as a large wholesaler supplying good quality bulk wine. Their big brands have opened doors, but it has created an image of big and powerful producers. Many South Africans lament the local industry's inability to do just that - Fridjhon maintains that our strength might paradoxically be just that. "We have an appellation system that is complex and old, that can give guarantees of provenance. Our inability to create big brands have given us a strength in authenticity," he says. Considering the tidal wave of varietal wines on the way from Spain ... considering that other countries will always have a subsidy somewhere, closer access to markets, more sunlight ... South Africa's saving grace might very well lie in "small" and "unique". The challenge is to commercialise South Africa's authenticity! Unity vs division United we stand, divided we fall. "We as an industry are electing to fall divided if we abdicate our responsibilities. We need a united front." Fridjhon makes a very important point in directing the industry to operate virtually as big companies. Networks, alliances and partnerships can offer the same benefits that big companies have in economy of scale. He argues that efficiencies can be increased by outsourcing and jointly managing resources in procurement, market information and production costs. These dilemmas require reflection, and goes against the lazy approach that simply "hopes for the best". Judging from the response and conversation inspired by Fridjhon's address, however, winemakers and viticulturists seem to have taken his dilemmas as serious challenges for the next ten years.

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