COVID-19 Q&A: Exporting, trading, serving and transporting liquor

by | Mar 30, 2020 | Covid-19

According to the Disaster Management Act and the national lockdown from midnight on 26 March 2020 to midnight on 16 April 2020, the export, sale, dispensing or transportation of alcoholic beverages are prohibited, with no exceptions.

See the following legislation:
Disaster Management Act Regulation 8 – 18 March 2020

Statement by President Cyril Ramaphosa on the escalation of measures to combat COVID-19 (the 21 day lockdown) – 23 March 2020

Amendments to Disaster Management Act Regulation 8 (following the lockdown) – 25 March 2020

Further Amendments to Disaster Management Act Regulation 8 (following the lockdown) – 26 March 2020

Q: What are the practical implications of the lockdown restrictions for the wine industry?

According to the abovementioned regulations (the latest being amended on 26 March 2020), no alcoholic beverages may be sold in the local market (either in the on- or off-trade), exported or transported.

Therefore, there may be no sale or delivery of alcoholic beverages either to an outlet, individual client or port.

Although online sales may continue, no delivery may take place during the lockdown.

In terms of the amendment on 26 March 2020, in which the wine industry has been confirmed as an essential agricultural service, the industry may complete the harvest and related cellar activities to ensure that the 2020 crop isn’t wasted. In terms of this, grape juice which is intended for wine may be transported in bulk, while the transport of alcohol remains prohibited.

As of 27 March 2020 the wine industry is in discussion with Government to lift the ban on exports, and further developments will be posted here.

Q: I am an exporter. How do I know that my wine will be able to be shipped to certain markets?

According to the abovementioned regulations, no alcoholic beverages may be exported during the 21 day lockdown.

Even though no wines may be exported from South Africa, you may follow these links for updated information on the status of ports throughout the world (updated continuously), for your interest:
Hillebrand port status
DHL port status

Q: What effect would these new regulations have on wine sales?

Although there is a clear understanding of the reason why this regulation has been implemented, it will have an enormous impact on the wine industry.

South Africa’s local wine sales declined by 6% in the year ending December 2019, and a further decline will have an adverse effect on profit margins throughout the wine value-chain.

Following the initial announcement of a National State of Disaster (pre-lockdown), wineries responded to these regulations quickly by driving their online sales offering, and encouraging consumers to support their favourite wine brands by ordering wine to be delivered to their doorstep. While no wine sales may be delivered during the lockdown, wineries and the industry still encourage consumers to order their wines for delivery after 16 April 2020.

While it’s believed that loyal customers will follow this route not to miss out on their favourite brands, the limitations will inadvertently contribute in a drop in wine sales.

Also, in terms of consumption patterns it is expected that consumers will opt for discounts and while it is hoped that sales volumes will be maintained at the very least, it may pose a challenge for producers to grow value during this time.

Q: Any concerns with regard to the policing of these regulations?

South Africa has around 65 000 licensed liquor outlets and more than 100 000 unlicensed outlets. The liquor industry is in continuous discussion with the relevant authorities, which includes an emphasis on the importance of proper policing to ensure that all relevant entities adhere to the regulations.

Regardless of concerns regarding policing, the law must be upheld and the industry calls on all wineries and establishments to strictly adhere to these regulations.

ENQUIRIES:
Wines of South Africa
maryna@wosa.co.za

Vinpro
info@vinpro.co.za

Brigadier Mathapelo Peters
Acting Spokesperson for the Ministry of Police
076 065 6502

Hlengiwe Nhlabathi
Spokesperson for the Ministry of Tourism
064 754 8426

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