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Despite the major setbacks that the South African wine industry have had to face this year, Vinpro remains positive and believes that the industry can once again reach its full potential over the next few years as all role-players shift their perceptions and behaviour.

A message of hope and encouragement was conveyed at the Vinpro Annual General Meeting, which was held virtually on 11 November 2020.

After an ongoing climatological drought, which had a serious effect on the industry’s financial position, the industry is now also facing a financial drought. The drought conditions have led to reduced supply and wine price increases, which, combined with financial pressures on local consumers and restored volumes in the Northern Hemisphere, have reduced sales volumes by the end of 2019.

The ban on exports and local liquor sales during South Africa’s national Covid-19 lockdown exacerbated the situation, leaving many producers, wineries and related businesses in dire straits, far more individuals out of work and the industry with an oversupply of uncontracted wine.

“However, despite all of these challenges, in the spirit of our 2020 Nedbank Vinpro Information Day slogan Touch and Change, our team has worked hard at shifting perceptions and behaviour to effect positive change in businesses, communities, the industry and policy environment,” said Vinpro chairman Anton Smuts.

Stop, stabilise & rebuild

Within the context of Covid-19, Vinpro has directed its efforts to stop the bleeding, stabilise the industry and start rebuilding it. “We’ve done this by tapping into our networks to influence and advocate, by providing members with relevant updates and resources, guiding them through purpose-driven services and supporting individuals and businesses to reach new heights,” Smuts said.

According to Vinpro MD Rico Basson the importance of advocacy, while forging and maintaining lasting relationships, was more evident than ever in the year under review, from 1 July 2019 to 30 June 2020.

Vinpro has always been involved in more than 50 industry and government forums covering the full spectrum from vineyard technical aspects to legislation. “This advocacy role was elevated, as we learned to advocate behind the scenes, push for outcomes and continuously negotiate our position,” said Basson.

A positive outcome was the securing of a post-Brexit deal that will enable South African wineries to export more than 70 million litres more to the UK tariff free from 1 January 2021, over and above the 114 million litres tariff free export deal that was secured with the EU before Brexit,” Basson said.

While the industry aims to stimulate demand, it also needs to continuously innovate to ensure a sustainable supply of exceptional quality grapes that are produced in the most efficient way. In addition to providing viticulture and soil science expertise to producers, Vinpro, through its Gen-Z Vineyard Project, partnered with Stellenbosch University to replant nearly 5 ha wine grapes at its Welgevallen experimental farm. “This will be a world-class learning site for students and researchers, but also a great demo site for producers and farm workers can see the latest techniques,” Basson said. At the same time Vinpro affiliate Vititec continues to ensure the industry has access to the latest, high quality cultivars according to their needs.

Another affiliate, FarmMS, will launch a new version of its flagship information management software, WineMS 2.0, within the next few months, which will enable producers, winemakers, viticulturists and winery boards to improve their decision-making by utilising the latest business intelligence. The WineMS team worked closely with Vinpro’s agricultural economists in the year under review to again roll out the Production Plan Survey, an important annual benchmark on the cost of wine grape production.

Over the past five years, Vinpro has empowered close to 6 000 people working in the South African wine industry through its vineyard worker training courses. “Covid-19 has proven to be a challenge in this regard, however, we still managed to train around 500 people in the year under review. This makes a huge difference in each person’s life and livelihood, but also improves productivity on the farm,” Basson said.

Inclusive growth remains a priority to ensure the sustainability of the industry. To this end, Vinpro has repositioned its previous Transformation Desk to what is now known as the Enterprise Development Desk, and is increasingly focusing on inclusive growth in terms of wine tourism and the local market, as well as in exports.

The South African wine industry has self-regulated in terms of responsible production, trade, marketing and consumption for a number of years. Aware.org was formalised a few years ago as a harm reduction vehicle, with Vinpro being aligned as contributing partner along with other alcoholic drinks industries. The Vinpro Foundation has also adapted and are doing a lot more at ground-level to support socio-economic upliftment in communities.

“A draft social compact is being negotiated and finalised through Nedlac, which will enable the industry to work with the seven national and provincial government departments and other role-players to collaborate closely on targeted interventions to drive long-term behavioural change,” Basson said.

No silver bullet

“Unfortunately there is no silver bullet that will provide the assurance that individuals, businesses and the broader industry will survive and thrive,” said Smuts. “We are here to level the soil, lay the foundation and hand you the building blocks. The success with which you will rebuild your own business and the industry, is in your hands.”

He thanked each person who has navigated through the challenges and opportunities with diligence and perseverance. “I would like to encourage you – let’s not only strive to rebuild the industry to the way it was before the crisis hit, but rather one that is even stronger and more sustainable in the long run. I know we have the resilience to do it, together.”

 

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