The Challenges of the South African Wine Industry in the Post-Covid Era

Authors: Denyse Lemaire*, Thomas Edison University, Suzanne Flynn, Rowan University
Topics: Wine, Beer, and Spirits, Africa
Keywords: Viticulture, South Africa
Session Type: Virtual Paper
Day: 4/9/2021
Start / End Time: 1:30 PM / 2:45 PM
Room: Virtual 32
Presentation File: No File Uploaded

The tradition of wine making in South Africa dates back to 1659, when the first wine was made from vines that had been brought to the Cape from France in 1655. A major step in the evolution of the wine industry occurred recently, at the end of apartheid in 1994. While wine production was highly regulated pre-1994, thoughtful reforms led to the restructuring of the industry, focusing more on quality than on volume. At the same time, new internationally known varieties of vines were successfully introduced.
However, wine farming requires heavy investments to begin production and many growers struggle to make a living. Statistics from 2018 show that only 14% of South African producers were sustainably profitable, 49% were making a marginal profit, 2% were breaking even, and 35% were losing money. Farming wine grapes was a distant third in profitability compared to producing apples or berries.

The impact of the Covid-19 pandemic in South Africa has been particularly severe on the wine industry. The South African government imposed a partial prohibition on the sale of alcoholic beverages, which left up to 300 million liters of wine unsold. In addition, the hospitality industry is closed and tourism has been virtually nonexistent. This paper will examine the future of the South African wine industry, suggesting strategies that may help it survive its current crisis.

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