Black wine businesses ‘snubbed by government’
FOODFORMZANSI / 27 AUGUST 2020 - 14.49 / DUNCAN MASIWA
‘The wine industry is not going to transform itself,’ says CEO of black, female-led wine brand
Women-owned business leaders are planning to take to the streets of Cape Town today to march against the alleged snubbing of black wine businesses by the department of agriculture, land reform and rural development.
The Black Wine Businesses action group, consisting of about 70 Western Cape wine farms and brands, says government is not supportive of black wine businesses and wine industry transformation, especially in the wake of the covid-19 pandemic. A memorandum with a list of demands will be handed over to the department.
The march is initiated by African Roots Wines, a Stellenbosch wine brand, to demand urgent high-level intervention from government and the depament of agriculture. Its CEO, Vivian Kleynhans, believes more should be done to unlock the full potential of the value and supply chains for entrepreneurs.
“We know that we can make a change and can contribute to the economy of the country and the wine industry, but government should be committed to assist,” Kleynhans says. “The wine industry is not going to transform itself. We must do it. We look back at the women of 1956 who were repressed and are inspired to stand up and say, ‘Enough is enough.’”
A call for economic inclusivity in wine industry
According to Kleynhans the march is to raise awareness of the daily challenges that black-owned businesses encounter in the wine industry. They are also calling on the department to ensure economic inclusivity and the sustainability of black-owned wine businesses.
Kleynhans tells Food For Mzansi that the pandemic has been a blow to them. “The larger wine brands have reserves, but black-owned wine businesses do not have that luxury. We are first-time-rounders and we do not have generational wealth.”
At a recent meeting with government and different stakeholders, they expressed their dissatisfaction with the economic exclusion of black business in the development of wine industry strategies.
’26 YEARS LATER AND WE ARE STILL IN THE MINORITY AND THAT IS WRONG. WE SHOULD BE AMONG THE TOP PERFORMING BRANDS AND WINERIES.’ – CARMEN STEVENS
The action group states that wine business owners – some of which have been operational for the past 15 years under challenging circumstances – find it extremely difficult to continue in a globally competitive environment.
“Most of the companies are positioned higher up in the value chain, with only a wine brand under which they are trading, mainly in the export market as the local market has been reluctant to take these brands on board,” the action group writes in their statement.
“Creating market access locally and building the visibility of the brands in international markets is a challenge because we do not have access to infrastructure, production facilities or land on which we can grow our own grapes.”
The action group furthermore acknowledges that the current business model for black-owned brands does lower the barriers to entry into the industry for them. However, they argue that “less than two percent of land in the wine industry is owned by black people and government does not have a workable strategy to address these imbalances.”
It says lack of land, production facilities, bottling plants and infrastructure are stumbling blocks for many businesses who are forced to compete globally for the discerning tastes of wine critics and connoisseurs. “Having access to land and infrastructure will give entrepreneurs full control over the wine value chain and the pricing structure of their wines,” Kleynhans says.
The South African wine industry is the seventh largest producer of quality wine globally and contributes R49 billion to the country’s annual gross domestic product. Wine is Mzansi’s second biggest agricultural export and earns more than R9 billion in foreign revenue annually.
The group of black wine business owners are also disheartened by the fact that 26 years since the dawn of democracy, there only a handful of black-owned cellars. These huge inequalities directly impact the long-term sustainability of the businesses, the group says.
African named brands struggle the most
Phil Bowes, the enterprise development manager at Vinpro says there are about 60 black-owned wine brands and about 54 black-owned vineyards. Very few of these vineyard owners have cellars open to the public.
“Black winemakers are proving themselves in shared ownership models or on their own,” Bowes says.
However, award-wining winemaker, Carmen Stevens, says it is unacceptable that after so many years, there is still only a few black-owned brands that are recognized.
“26 years later and we are still in the minority and that is wrong. We should be among the top performing brands and wineries.”
Bowes confirms that many brands with African names have had a tough time trying to penetrate the SA market. It takes a lot of work for these brands to gain customer acceptance.
“My experience is that this is similar for many black traders of wine, who buy it and sell it under either an African label, or with the promise of bringing a story to the product.”
Bowes states that access to financing for the industry as a whole has been tough for the past 20 years. Farm gate prices for grapes have negatively influenced the product compared with lucrative cash crops and grains.
“The geopolitics have not boded well for land reform and post-settlement support budgets, since the Western Cape is seen as a wealthier province and in need of less government land reform support than certain other provinces,” Bowes adds.
The action group believes the participation of black directors on the boards of wine business units and wine businesses are too limited. According to them, black professionals often leave the industry in pursuit of better opportunities.
“The (shrinking of the) pool of skills and experience which was built over many years is a loss to the industry. This is evident throughout the industry and a reflection that transformation is not a priority in the wine industry for both government and industry.”
To address the challenges, most of the women-owned businesses are collaborating to unlock and unblock business opportunities. They are hoping to increase economic growth, job creation and equality in a deeply divided sector.
Stevens says: “Government needs to make transformation within the wine industry a priority. When I say a priority, I am not talking about skills development. It’s about giving people what is needed to scale their businesses.”
The wine industry encompass vine growing and the harvesting of grapes by more than 40 000 farm workers. In 2016, South Africa exported 460 million litres of wines and reported sales of 400 million litres of wine locally.
The department of agriculture declined to comment until a memorandum was received by their department.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER