COVID-19: South Africa’s wine export ban to cost producers over £43m

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Wines of South Africa (WOSA) has predicted that the five-week lock-down ban on wine exports could cost the South African wine industry more than one billion Rand (£43 million), while the damage to reputation and consistent supply, as well as future market opportunities could be astronomical in the longer term.

According to them, despite an initial exemption made by the government on the 7th of April to allow the transport of finished goods to harbours and airports for the purpose of export, this exemption was revoked in a government briefing on the 16th of April, bringing to a halt the South African wine industry which on average, exports wine to the value of R175 million.

In a statement, WOSA said: “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 on the export of bulk and packaged wine, raises a significant risk towards the economic sustainability of this industry and, more importantly, the social-economic stability of the rural communities where more than 40,000 workers and their dependants are employed on grape farms and wineries.”

“Through extensive lobbying the wine industry has continuously engaged with various government entities to urgently request that wine for export be classified as an essential food product, which will allow producers to ship finished goods (packaged and bulk wine) during the lock-down period,” it added.

WOSA said the effect of the ban, compounded with the fact that all local sales and distribution of wine is also strictly prohibited, could see an industry which has been struggling financially for years, finally brought to its knees.

It further noted that, “As an industry, our contribution to the GDP for the SA economy exceeds R49 billion annually and creates roughly 290,000 jobs directly and indirectly. As South Africa’s second biggest agricultural export product, wine earns more than R9 billion worth of foreign revenue each year through exports of roughly 50% of total production, with the other 50% sold locally.”

Currently, South Africa is the only wine producing country to experience such a stringent ban on exports in this time.

The statement said: “Despite the industry clearly appreciating and embracing government regulations that have been implemented to ‘flatten the curve’ of the Coronavirus, the South African wine industry’s pleas are seemingly falling on deaf ears with the government.

“The ban placed on wine exports is counter-productive, as it raises a significant risk to the economic, and more importantly, socio-economic stability of South Africa, along with risking the livelihoods of rural communities who will be directly affected due to the financial implications from an industry that could quite likely see devastation.”

However, in talks with government, the industry has outlined clear plans which take the safety of each and every individual into consideration, putting clear measures in place in order to ensure the containment of the novel Coronavirus.

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