Perception and reality: perspectives from abroad

by | Mar 5, 2021 | Article, Business and Marketing

On 23 March 2014, the World Health Organisation (WHO) announced an outbreak of Ebola in West Africa. Soon enough, international tourists began cancelling trips to African destinations, including South Africa more than 5 000 km away. From the outside, the association was close enough to be damning. Fast forward to 2020, and the SARS-CoV-2 variant 501Y.V2 becomes known as the “South African variant”, because it was first identified in South Africa, sparking another wave of stigma. The potential impact of disease names on trade, travel, tourism or animal welfare because of guilt-by-association is why the WHO started advising against associating diseases with places or people in 2015. After all, the Spanish Flu didn’t actually come from Spain.

The point is, perception often becomes reality. If a buyer is under the impression it’s difficult to get access to our wines, or that EUR1 certificate (which allows countries to import goods at much lower duties under existing trade agreements) are difficult to obtain, it’s an image problem that can easily turn into an export and revenue problem. As Torsten Helbig, managing director of Eggers and Franke in Germany, says “to stay competitive in relation to other overseas wine in the market, it’s important to get the EUR.1 tariff-rate quota.”

Containing the problem

The pandemic disrupted routes to market globally – and often permanently. Issues were to be expected, especially since most trading partners were dealing with the same threat and challenges on their side. But although the lockdowns could be justified, bans on the production and transportation of wines severely impacted the international trade and confounded our trading partners.

The port congestion is another factor that could have been handled better. “Containers were not able to load and there weren’t enough containers to prepare loading,” says Torsten. “And since loading depends on non-stormy days, winter weather exacerbated the problem.” He also experienced problems with duty papers that went missing when DAFF (Department of Forestry and Fisheries) closed due to Covid-19 infections. Pro-active local suppliers helped mitigate these problems. Sufficient warning from suppliers and forwarding agents helped anticipate delays and Torsten reports they were fortunately never out of stock.

Michael Broadbent, founder and CEO of the prominent American wine importer Broadbent Selections, which represents a number of premium South African wine brands including Vilafonté and AA Badenhorst, says normally things run pretty efficiently and their lead times are similar to a lot of other wine regions. “Our suppliers occasionally run into issues sourcing dry goods (labels, cardboard wine cases, and especially glass bottles) for orders,” he says. “This is also true of Madeira, of which both places of origin I would consider to be relatively isolated from the larger wine world. But overall these delays are not common.”

In Torsten’s estimation, the most pressing issues to address concern transparency and communication. “Invest in good working conditions for vineyard workers, since bad treatment is sometimes a topic in business magazines. Tell the world how the workers were treated.” He also believes not enough people are aware of our achievements in sustainable production.

Saving graces

Fortunately the price and quality of South African wines has helped smooth over many other inconveniences. Buyers have noted the steadfast support from the industry and recognise WoSA and SAWIS’s efforts. As stakeholders in the wine trade, they have often been equally disappointed by government’s apathy towards the industry.

Torsten is appreciative of his enduring partnerships in South Africa, speaking of a deep trust on both sides – not to mention the quality of our branded wines. Although the wine category in general and in South Africa in particular has been declining, he is positive about the prospects here. “Branded wines with a clear and consistent consumer proposition can develop positively against the category trend.”

“The wines are of spectacular quality, good value and the people in South Africa are amazing,” adds Michael. “From the dynamic Mike Ratcliffe, to the philosophical Eben Sadie, to the genius of Chris Alheit, to the character of Adi Badenhorst, to the magnificence of Delaire Graff… it goes on and on. South Africa’s beautiful wine region and fine restaurants make it the most desirable place to visit.”

Through thick and thin

“Our family business has been doing business with large and small companies in the South African wine industry for over 15 years,” says Matthias Vollherbst, managing owner of the German company Vollherbst Labels. “During all these years, the relationship has faced major challenges such as exchange rate fluctuations, transport difficulties, new legislation and most recently, of course, the Coronavirus pandemic.”

“Throughout all these years and in particularly challenging times, we have always found solutions with our South African contacts,” says Matthias.

“For us as a medium-sized, family-owned company, it has always been important to reduce risks and to be able to trust our counterpart. This trust has been present over all this time and is something that, from our experience, is very typical for the wine industry – also in other markets such as our home market Germany. South African wineries are in no way inferior to this commitment and trustworthiness. That’s how you get through crises together.

“What makes South African wine companies unique for us is the stamina, perseverance and creativity with which people always face new challenges. Droughts, devastating fires, weeks-long bans on the sale of alcohol – these are substantial problems in South Africa that winemakers in our regions do not experience to the same extent. There are probably problems here in the Northern Hemisphere that are more unfamiliar to South Africans, but I think all in all the South African wine industry is challenged to a significantly higher degree. The fact that the people get through this again and again, always remain positive and are never at a loss for a solution, one can only sincerely take one’s hat off to that.

“As a partner of the industry, we suffer with every problem – because firstly, every unsold bottle is also missing a label, and secondly, partnerships and friendships have developed over the many years, where people simply help each other like in a family. This emotionality, cordiality, and friendliness is also something very typical of the South African wine industry. It has fascinated us since the first moment we were allowed to enter its world. It captivates and triggers us in that we want to be a part of it with all its strengths and weaknesses.

“Last and most importantly, it fascinates and inspires us again and again not to give up when we are down, to stay positive together even if it sometimes seems so hopeless and to always go into the future with new ideas in order to still have a purpose of existence the day after tomorrow. For all this, we are heartily grateful to South Africa and its wine industry!”

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