The South African wine industry is committed to supporting Government’s efforts to curb the risk that the COVID-19 virus poses to our society, our employees, their families and our communities.
To this end we would like to keep our members informed of the activities and progress to date.
Over the past couple of days we have collated all relevant information pertaining to both the wine industry and the liquor industry at large and concluded a number of interactive engagements (re Transnet and others). We have also submitted the respective business cases, including supporting documentation ranging from financials and economic impact, to the socio-economic impact and forecasts, based on current trends that are taking shape (with some scenarios predicting a severe financial crisis and direct loss of jobs in the event of a prolonged lockdown).
Please see only concise feedback on relevant issues to date below.
The Exporter Task Team has been hard at work over the past three days, building a case to put forward to the Ministers of Agriculture and DTI. This was submitted by WoSA, Vinpro and SALBA on behalf of the wine industry yesterday afternoon and we have asked for a revert by Friday this week (3 April 2020).
The position we have taken is that whilst we have the highest regard for the magnitude of the COVID-19 crisis we are dealing with and fully subscribe to the measures needed to ensure containment, we also need to position that the ban placed on the export of bulk and packaged wine, does raise a significant risk towards the economic sustainability of this industry and more importantly the socio economic stability of the rural communities where more than 40,000 workers and their dependents are employed on grape farms and in wineries.
We have received a multitude of letters that was submitted to National Government from our customers abroad and local wineries/exporters and various stakeholders in key markets who are in support of our appeal and our request to government, which demonstrates the concerns raised and implications of the export ban during the lock down period.
Bearing the above in mind, we have requested that:
- Wine for export be classified as an essential product and service to ensure sustainability of the sector.
- During the lockdown period, producers be allowed to ship finished goods – both packaged and in bulk format.
- Confirmation be sent to the wine industry that we will be allowed to resume all related export processes come the 17th of April 2020.
We have requested the Ministers’ urgent assistance to obtain a directive from the Department of Agriculture, the DTI and relevant departments to allow the export of wine as well as related activities pertaining to the transport thereof to the relevant ports to continue. We have also involved the Western Cape Ministries of Agriculture as well as Finance and Economic opportunities as well as Wesgro who are in support and will actively assist.
We endeavour to keep you updated on developments as they unfold.
CAPACITY OF PORTS
During the engagement with TPT (Transnet, Port Terminals), it was clear that due to the COVID-19 regulations a number of operational port activities, and normal modus operandi, were severely challenged. This led to an adverse effect on output (operating at almost 30% capacity, whilst striving for 60% during the lockdown period).
Bear in mind that although our focus is predominantly on the export of wine, it is also important to understand the impact on crucial imports for the industry (wine barrels, bottles and chemicals), hence both the on-loading and off-loading in ports are important to the wine industry.
A SAMSA newsletter is doing the rounds and although the content bodes very well for all the efforts thus far, it is important to understand that TPT, including the Ministries of Transport and Police, will only be guided by the amended regulations, as per the Disaster Management Act (which refers to essential and non-essential services) which we expect in due course.
However, it was encouraging to learn the views, dedication and commitment of the acting CEO to deal with all the blockages, personnel challenges and a whole array of other practical implications. Going forward a weekly zoom-meeting has been scheduled.
APPLICATION FOR EXCISE RELIEF
In order to offset the financial impact of Government’s decision to prohibit the sale of alcohol across all channels during the current lockdown period, the South African wine and brandy industry submitted a proposal to Government on 1 April 2020, to postpone excise payments to support the stability and operational functionality of the legal liquor industry in South Africa.
The industry requested that excise payments be postponed with effect from 1 April 2020. In the absence of urgent Government intervention, there is an imminent risk of liquor business closures, which at best will result in industry consolidation and at worst a collapse of a legal liquor industry structure. Such an outcome would not only have a negative impact on future tax revenue, but also poses a significant risk for illicit trade operators to expand their share of the liquor trade in South Africa.
While we are waiting for a formal response, we would like to encourage all business entities to continue to honour all obligations. We understand the extremely difficult situation, but need to act responsibly and keep the communication lines open to any third parties.
LABOUR AND SAFETY DURING TRANSPORT
We would like to emphasise that, while we are all currently trying to adapt to the “new normal” during the lockdown, we still need to adhere to the existing labour legislation and ethical conduct, with extra precautions as necessitated during the COVID-19 pandemic.
Although the regulations don’t stipulate guidelines for health and safety during private transport, including in/on vehicles such as trucks and bakkies, we would strongly advise that the normal COVID-19 guidelines are upheld. These include:
- Try to minimise the number of people in close proximity (rather drive/work in shifts)
- During transport urge passengers to practice social distancing (1 m apart) as well as sneezing or coughing into a tissue or their elbow.
- If possible, try to provide masks and/or hand sanitiser to passengers.
We have received communication from concerned labour organisations on precautionary measures due to COVID-19, transport of workers, wages and UIF to name but a few and provided high-level feedback in response.
The respective industry organisations (wine and fruit) and organised agriculture have repeatedly informed our members of the COVID-19 guidelines, in particular those pertaining to the transport of workers and mitigating risk in the workplace, and will continue to do so going forward.
We have also received a message from the Department of Labour to please encourage our members to comply fully with the conditions and regulations of the lockdown. All companies should have adequate hand-washing and sanitising measures and reasonable social distancing measures in place.
We would like express our gratitude to all employers for adapting their practices during these trying times and please continue to operate within the guidelines of your preferred ethical code (Wieta, Siza, Fairtrade, BSCI) and practice due care in this regard.
If you have a minute to spare, please note what is taking shape in other wine countries, like New Zealand. Read more.
With regard to financial aid and relief, we are working closely with the business community (Agbiz/BUSA) and Government (DTIC/SARS) and have distributed all the information with regards to tax/other relief and UIF measures, to our members to consider utilisation on a case-case basis. We will explore other support measures as we go forward.
The respective industries will continue to do anything in our power to inform our members with the latest information as it becomes available in order to ensure ongoing essential production and cellar activities to continue, but also to reduce the impact on potential job losses as far as possible.
Any person travelling for work purposes (essential services), or transporting employees for work purposes needs to be in possession of:
- A permit/letter of employment on an official company letterhead.
- Official personal identification (ID document, passport or other official photo ID) with her/him when travelling to and from work.
Vinpro members may use any of the following templates:
Agri SA lockdown employment letter
Agri SA, Vinpro & Agri Western Cape employment letter
According to the latest transport regulations, there are restrictions on the times that employees may be transported either via public or private transport.
Private institutions or companies may make arrangements for the transportation of their employees who are rendering essentials services. However, the operating shifts, work schedules or timetables should be stamped and signed by a person with authority (manager/employer). We recommend that employers attach the stamped and signed operating shifts as an addendum to the existing permits/letters of employment above.
DTI BIZPORTAL REGISTRATION
The South African wine industry has received a concession from Government that “harvesting and storage activities essential to prevent the wastage of primary agricultural goods” would be regarded as essential services that may continue during the lockdown.
Although not obligatory in terms of the Disaster Management Act Regulations, we would like to strongly advise that all businesses that fall under the category of essential services in terms of the abovementioned definition register as an essential service on www.bizportal.gov.za.
This portal has been put in place as an additional measure to give comfort to business and employees if they get stopped by law enforcement officers and may become a requirement in future. It will also help government understand and better manage essential business services during this time. Only registered companies are able and currently required to get certificates from Bizportal.
Read the Agbiz Q&A on lockdown for agribusinesses on issues regarding registration, permits and other relevant questions.
We undertake to keep you informed of further developments as they unfold.