You never, ever want to read the words “jobs” and “bloodbath” in the same sentence, but these are the times in which we live.
South Africa’s economy under the first month of national lockdown has already been described in such terms, and now wine industry insiders are talking about the incredibly difficult 18 or so months that lie ahead.
The situation is so dire that around 430 wineries and grape producers are expected to go out of business during that time frame, which could cost in excess of 20 000 jobs, reports Moneyweb.
It’s great that the decision to allow the sale of alcohol has now been taken, but for many, it’s a case of too little, too late:
Theo de Jager, chair of the Southern African Agri Initiative (Saai) board of directors, says there has already been a bloodbath of jobs in the wine industry, with production for 2020 and 2021 also severely affected by the lockdown regulations.
“Overflowing cellars have no storage capacity in tanks and barrels, and have already notified producers that they are unable to allocate 2021 quotas,” he says.
“A farm cannot be closed down for a year, and very few family farmers are able to survive two consecutive years’ loss of income or turnover.”
Rico Basson, from wine industry organisation Vinpro, agrees, saying they are “dismayed at the extent of the damage caused to our industry during the temporary ban on exports and extended restrictions on local sales”.
Nobody is throwing in the towel, however, and Vinpro is working on a “disaster recovery plan”:
This includes the extension of further excise relief for the current year as well as the 2021 season, addressing bottlenecks and challenges at the Port of Cape Town, and formulating solutions to reduce a current wine surplus of around 300 million litres.
We’ve covered the dangers of a huge surplus of champagne before, and in that instance, it looks like it’s the producers that suffer.
The damage wrought by the pandemic extends beyond the alcohol industry, and similar tales of woe are coming out of our restaurant industry, too.
As of today, restaurants can put away their ‘teapots’ and openly serve alcohol, but again, it’s perhaps too little, too late.
Here’s some of what she said:
“What is it going to take for the consumer to eat out because her purse has shrunk?
The shrinking of incomes… We’re not out of the woods. We’re taking one step at a time… We must make our restaurants leaner and meaner…
Some really big names have closed down. A lot will open again… We don’t know.”
According to a Fitch SA Consumer & Retail report, there are around 500 000 people directly employed by an estimated 15 000 sit-down restaurants.
While some big franchises may be able to weather the storm, they only account for around 10% of the total restaurants, with the rest being small businesses that are under immense stress.
You can listen to that full interview below:
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