Making SA wine great again

Sometimes you need to shake the tree to see if apples or serpents fall out.

I recently wrote an opinion piece about transformation (or lack of it) in the wine industry and managed to gather a splendid harvest of both. I wasn’t surprised. Transformation has passed from being a convenient buzzword to a shibboleth, a statement of intent rather than the intent itself. While as a concept (and more importantly, as an investment), it has been with us since the early 1990s, it doesn’t always manifest as a tangible reality. It is dangerous to question, but not safe to ignore.

I argued that, despite millions invested over the years by producers through statutory levies and their own discretionary funds, a large chunk of the industry remains largely untransformed.

The stats speak for themselves: while wholesale, distribution and retail (specially the last mentioned) begin to represent the SA demographic, only 2% of primary production is owned/controlled by black people.

Thirty years into democracy, if the transformation budgets haven’t been appallingly mismanaged, there must be a structural issue that makes the objective unattainable. I argued the reasons were clear enough: why would any sane person buy into the least profitable segment of the trade? Grape growing and wine production are marginal enterprises. Since 1994 the number of growers has halved, while the area under vine has declined by more than 20%. The kind of dividend flow that made the transformation of the mining sector possible in the post-1994 era is simply not available when it comes to grape growing/wine making.

Despite the transparency of the logic, the article attracted the kind of flak last seen over Berlin in early 1945. Some comments rightly acknowledged achievements in education. In the wine industry, the gap in earning potential — not to mention job satisfaction — between skilled and unskilled labour is significant. Invest money in training for the craft side of viticulture (for example, caring for old vines) and you have a specialised worker who can never be replaced by a machine. You also have an employee whose value-add is measurable in terms of the extra margin achieved in selling wines that are certified Old Vine products.

By the same token, the investments in training young winemakers and in community upliftment made by Nedbank through its Cape Winemakers Guild sponsorship have had an extraordinary multiplier effect. Youngsters who in a previous generation might have found themselves unemployed and unemployable (with all the attendant risks of township life) hold down meaningful positions in some of our top wineries.

Among the comments triggered by the article was a thought-provoking insight from author and wine commentator Emile Joubert. He observed the black-owned brands category has not made it its business “to become a true part of the Cape wine offering. The majority of the brands have not created ... sufficient awareness ... with consumers, the trade and the general avenues of wine promotion. With an exclusive focus on transformation and BEE, the real message ... of wine quality and brand authenticity is lacking.”

He’s on the money. SA Wine, the formal industry body that manages funding for exports, technology and BEE needs to rethink its strategy if it is to obtain a result that is substantially different from what the past three decades have yielded. The bulk of its empowerment budgets goes to black-owned brands whose existence is so fragile that without subventions they would disappear. This yields a counterproductive result in the messaging.

Its most generous subsidies for BEE-compliant producers to attend the industry’s big export show (Cape Wine 2025) in September require them to join the BEE stand. The more substantial entities — those with vineyards and a winery rather than a label they apply to wine made by someone else — cannot afford to locate themselves in what is seen as handout space. International buyers intuitively recognise Joubert’s observation about brand authenticity. Even the whiff of affirmative action is a burden in an industry where legitimacy is everything.

This column originally appeared in Business Day.