BEYOND THE LOCKDOWN: What Big Business Is Doing Now
THE VERDANT vineyards of Stellenbosch, a charming wine town in South Africa’s Western Cape province, offer breath-taking, panoramic views of the rolling hills, valleys and mountain ranges fringing them.
Only that there are no tourists to marvel at them now – and perhaps will not be for a long time to come.
Like good wine, these views will stay but who will savor them?
Like every other industry on the planet, South Africa’s wine industry too, which produces some of the finest wines and spirits globally and employs millions in its tourism collaterals, has been severely impacted by the Covid-19 pandemic.
Even with the President Cyril Ramaphosa (whose leadership at this time was commended by world leaders and media) easing lockdown restrictions to Level 4 on May 1, liquor and wine sales are prohibited, and the big players say the local industry has taken a hit.
Former banking CEO and wine entrepreneur Michael Jordaan speaks about the effects the crisis has had on business.
“Local sales represent 50% of industry turnover,” says Jordaan. The export ban was lifted five weeks after the lockdown but by then, he feels “precious sales and rack space” in export markets were lost to foreign competitors. “Related wine businesses such as wine tourism or restaurants are suffering the most as income has gone to zero while many costs remain.”
The wine industry is already a high-cost, low-margin business, he adds, with industry surveys showing that only 28% of wine grape producers made a profit in 2019.
Most wineries were cash-strapped to start with, and the pandemic has left a bitter aftertaste.
“It is inevitable that many of the 290,000 jobs in the industry will be lost...” he says.
Premium wine houses are now looking at offbeat ways to sell and deliver online.
Jordaan’s Bartinney Wines – in the Jordaan family since 1953 – is produced from a 28-hectare farm in Stellenbosch, and he says he has made it a priority to look after staff using savings and income from non-wine businesses.
“We’re also exploring new export markets but struggle as this usually requires trips to sellers which are obviously not possible,” he adds.
The wine-drinking wealthy across the continent are also not immune to the crisis. Some South African billionaires, listed by Forbes every year, made announcements to help fight Covid-19 even before the government announced the lockdown.
Billionaire Johann Rupert and family, worth $4.6 billion (as of mid-May according to ), announced the relief program received applications in excess of R2.8 billion ($153 million).
