For The People

Wine producers lose money from export ban

The beginning of the national lockdown saw a ban of sales of alcohol and nicotine products. As the Covid-19 committee advised the President that the continuation of selling of these could lead to a tremendous increase of Covid-19 cases in South Africa. Bearing in mind that South Africa holds the highest score in alcoholism which contributes greatly to road accidents and domestic violence.

The extension of the national lockdown came with new regulation measures, where the minister of cooperative governance and traditional affairs Nkosazana Dlamini-Zuma announced on the 16th of April that transportation of consumable alcohol is prohibited.  On that same day, transport minister Fikile Mbalula released a review of lockdown measures that confirmed that indeed transportation of alcohol is prohibited. The ban was propelled by the recent burglaries and theft of alcohol from closed outlets around the country and the increased trend of alcohol being sold on the black market.

This left the wine industry producers confused and frustrated as this meant 290 000 jobs are on the line.

Wines of South Africa (WOSA) says the industry is disappointed with the changes in the gazette. WOSA spokesperson Maryna Calow said the decision had put the livelihood and long term future of the industry in grave danger.

Calow said the industry was considering a legal challenge of the changes.

“If there is a route and grounds for legal recourse, we will follow that. For now, we are investigating our available options,” said Calow.

The Minister of Agriculture for Western Cape Government, Dr Ivan Meyer immediately appealed to the minister of agriculture, land reform and rural development in a document on the 17th April, stating that the Western Cape has the highest number of wine cellars.

The wine industry exports between 420 million and 450 million litres a year. However, only 320 million litres were exported last year due to a drought that lasted 3 years. The wine industry’s contribution to the GDP for the economy exceeds $2.6 billion annually and creates roughly 290,000 jobs directly and indirectly. These figures include close to $400 million excise and VAT contribution to the South African Revenue Service as per 2019. As South Africa’s second biggest agricultural export product, wine earns close to $500 million worth of foreign revenue each year through exports of roughly 50% of total production, with the other 50% sold locally. The ban on transportation of the wines have left the producers reputation tainted.

On 17 April, the Presidency also declined the request of the Gauteng Liquor Forum members to sell alcohol locally during the National State of Disaster.

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