A dedicated platform now makes it easier for you to find your ideal BEE (or commercial) match.
Black economic empowerment (BEE) is not only the right thing to do. If you find the right partner, it can benefit all the parties involved. The wine industry’s Business Linkages Programme provides a desk where black and commercial entities and any other investors in the wine industry can engage according to their mutual needs.
“Our goal with the Business Linkages Programme is to facilitate trade and partnership engagements in a more structured way,” Vinpro transformation and development officer Unathi Mantshongo says. “This will stimulate the participation of black entrepreneurs and graduate professionals in the wine value chain and benefit the industry as a whole.”
The bigger picture
Thanks to the Wine Industry Strategic Exercise (Wise) the South African wine and brandy industry has identified transformation as a game changer and to this end has adopted a number of strategies in collaboration with other role players to address obstacles to change. But despite these strategies the success rate of creating partnerships between existing commercial and emerging entities remains low and a large part of the wine industry is still untransformed.
If the industry can’t demonstrate improvement in the national Broad-based Black Economic Empowerment (B-BBEE) scorecards, especially when it comes to priority elements such as ownership, skills development, and enterprise and supplier development, it risks losing its statutory levy income and commercial businesses risk losing their liquor licensing under the Amended AgriBEE Sector Code 2017, Unathi warns.
More than only compliance
Although businesses need to comply with the B-BBEE codes, the benefits are not always recognised, Vinpro transformation and development manager Phil Bowes says. “The country needs to rectify disparities in an ordered and measurable way,” he says. “Without consistent measurement through the codes, progress can’t be determined and the process towards progress can’t be advanced.”
Through the revised B-BBEE codes the department of trade and industry wants to incentivise ownership, skills development, and enterprise and supplier development on the Agri scorecard. The opportunities related to these elements are however not always apparent to commercial entities, and the industry is lagging behind in these areas.
By linking existing farms with the right investors and partners who have similar values and plans, all entities can remain viable. Management control can be implemented through work-based skills and employment equity plans, mentorship and allowing access into valuable networks. A diversified management team can also bring new insights, while a more productive, educated workforce comes from upskilling staff across the entire industry spectrum.
“The crux of the Business Linkage Programme is to cultivate authentic value on all sides of the ethnic spectrum,” Phil says. “Agri linkages were tried and tested by USAid through the Southern African Agri Business Linkages programme (SAIBL) in the early to mid 2000s. Vinpro’s Business Linkage Programme is a continuation of some of the value that was demonstrated in those programmes which were designed to help the second economy to catch up with the first.”
The friendship model
Whether you’re looking for a short term or lifelong business relationship, the Business Linkages Programme is creating an assessment tool to facilitate partnerships based on the three types of friendship identified by Aristotle.
In a partnership based on convenience or utility both parties would define success as receiving dividends from an investment to supplement income, greater market access, an improved B-BBEE scorecard and access to state or low-interest finance. This is also viewed as a safer investment option.
When both parties are looking for a once-off or short-term investment with high, quick returns, it’s categorised as a friendship or partnership based on pleasure. It requires dynamic thinking and business flexibility as opportunities are often time-bound.
A partnership based on character or doing good values legacy, generational wealth build-up, national contribution and the creation of access over and above monetary returns.
When participating in the Business Linkages Programme each party is assessed according to the above-mentioned principles and the necessary documentation and interviews are provided and conducted to vet each partner properly and determine whether they have similar business imperatives before entering into a formal agreement.
“Through our work at Vinpro we meet a diverse group of talented people and businesses who could add value to many a wine venture,” Phil says. “We’re honoured to be involved in some really good relationships that are currently being forged.”
Vinpro has access to both commercial producers looking for the most effective way to address gaps in their B-BBEE scorecard through its transformation and development division, and black entrants (producers, brand owners, suppliers and graduate professionals) and socioeconomic upliftment initiatives through its involvement in the wine industry Transformation Unit and Vinpro Foundation. l
What does success look like?
“In the Business Linkage Programme, success can be described as diverse growth that raises the entire industry and not just one segment of it,” Phil says. This manifests as the number of fruitful linkages made between funders and applicants, black and commercial business, talent and opportunity, black businesses and growth, black talent and business ownership or management.
“We strive towards an inclusive, thriving industry that’s a benchmark in SA agriculture. The Business Linkages Programme will, along with many other strategic initiatives, help us reach this goal,” Unathi says.