Ben Jordaan2 300x450 1
Ben Jordaan, director of procurement at Cape Wine Exporters.

The viability of the South African wine industry is largely dependent on wine exports, and according to WoSA (Wines of South Africa), the industry is currently losing close to R200 million every week that the lockdown continues.

Ben Jordaan, former winemaker at Kumala and currently, the director of procurement at Cape Wine Exporters provides some valuable insight into the wine export debacle that is forcing the South African wine industry to its knees.

What’s your take on government’s decision to ban the export of alcohol?

It is a nonsensical decision that’s put the industry and government in a big economic predicament. Not only are we losing hundreds of thousands of rands worth of business, but government is also losing millions in tax and excise. Money that will be much needed for food and basic supplies in the long run. I don’t understand the rationale behind the decision as the wine industry has a fairly low risk exposure to COVID-19. The decision was made without proper stakeholder engagement and without taking a long-term view, and whether it’s political driven, I’m not sure … Fact is, the industry will bleed, and it’s the producer at farm level that will feel it the most.

What’s the current situation?

It’s a big concern. At the moment, if you consider all of the major bulk wine exporters in South Africa, there’s roughly 10 to 15 million litres of bulk orders just sitting at wineries, waiting to be shipped to UK, Europe, North America, Asia and Russia. If this continues, we’ll have to release products at a huge lose, and potentially lose very important trade listings abroad – with some of the trade relationships going back 20 years.

What’s the consensus from the international wine market?

The international market is keeping a watchful eye on what’s going on here in South Africa, and they’re pretty well informed. At the moment, the world is sitting with excess wine from the 2019 vintage, which is piling up the problem. The rand-dollar exchange rate is a plus for international sales, but not guaranteed if our prices are not competitive.

Are there any opportunities?

Yes. Should Europe have an average-to-bad harvest, it could open the door for the Southern Hemisphere to supply. However, with places like Chile and Argentina already being very competitive in pricing and supply, we’ll have to adjust our 2020 prices by 10 to 15%, to make sure it’s internationally viable. If we could even work in a 15 to 20% price adjustment on the old vintage wines, which could help lower the average price on the 2020 vintage. It might be a ‘Hail Mary’ for the wine industry.

What’s the solution going forward?

I don’t think the current situation will ruin the industry completely, but we’ll have to cut our losses. We’ll have to market our wines aggressively, and cast our nets wider to more emerging markets. European buyers are shopping around for wine in South Africa at the moment (it didn’t happen that much in 2019), because they know that should things go awry in Europe, they’ll have a backup. A lower volume harvest in Europe could potentially open the doors for South Africa to grow our market share in the UK, Europe and North America.

Anything else you’d like to add?

I’d like to commend the Wine Industry Task Team, especially Vinpro, for the great work they’ve done behind the scenes. They never stop fighting for the survival of the industry and they’re doing a fantastic job! I think this highlights the massive scale in which the wine industry contributes to the country’s economic infrastructure and I do think we have to in future be more cognisant of our relationship with government.