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Wine-related businesses such as cellars can receive various benefits from partnering with black economic empowerment (BEE) enterprises, including recognition under the Enterprise and Supplier Development (ESD) element of South Africa’s Agri-BEE Scorecard. Vinpro enterprise development manager Phil Bowes explains.

How will it help my business?

ESD is one of the big ticket items on the Agri-BEE scorecard. It carries a lofty 40 points for large enterprises (turnover greater than R50 million) and 25 points for qualifying small enterprises (turnover of between R10 million and R50 million). Both large and small enterprises who want to embark on the long road to obtaining a liquor licence need at a minimum to aim for level 8 compliance, and would therefore want to earn as many of these points as they can.

Few suppliers in the wine industry have black ownership or have the 2 point bonus of being more than 51% black owned. However, if you partner with a strong ESD supplier, it can expand its goods and services to accommodate other needs in your business. The revised Agri-BEE codes provide for commercial businesses partnering with each other to augment their support for a single ESD supplier.

What level do I target if I’m non-compliant?

Aim one or more levels higher than you hope to reach. The revised Agri-BEE codes penalise, or discount, businesses by one level for not complying with the priority elements of ownership, skills development and ESD, even though they might score high in the other elements, namely socio-economic development and management control.

If you hope to end up with a level 8 scorecard (requiring a maximum total of 54 points) and you manage to achieve 20 points for ESD, you could easily make up another 35 points with a few tweaks to the skills development and socio-economic development contributions to end up with 55 points, which is the minimum for a level 7 contributor. In this example, a level 7 contributor would be discounted as there is no contribution to ownership, but would still be at level 8.

Businesses are only discounted once if they don’t meet one of the three priority elements, not for all three in one scorecard.

Where can I get more BEE advice?

Vinpro’s enterprise development manager, Phil Bowes, can assist wine-related businesses in identifying opportunities in their Agri-BEE scorecards, while linking them up with potential BEE partners. Contact Phil Bowes on cell 083 581 4322 or email phil@vinpro.co.za.

 

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