Trouble was fermenting in the wine industry long before lockdown
The loss of more than 2,000 growers and full extent of uncontracted stock cannot be blamed fully on the pandemic
The year of the pandemic tipped the Cape wine industry into the crisis it had been skirting for several years.
The ban on domestic wine sales wiped out 40% of the trading year. A complete prohibition on exports during lockdown level 5 cost about 80 million litres of sales. Restrictions affecting the hospitality sector caused restaurants to be unable to trade; the number of foreign visitors slowed to a trickle. By mid-2020 the volume of uncontracted bulk inventory in the industry added up to almost 300 million litres.
There are two separate components to this surplus: fruit and fluid. The Cape wine industry comprises about 2,700 grape growers, about 540 wineries and just more than 120 bulk wine buyers. The ratio of growers to crush facilities is about five to one: about 80% of those who produce grapes are entirely dependent on those who transform them into wine. Crush cellars can only accept fruit if the bulk buyers have been purchasing wine. To the extent that unsold inventory from 2020 is still sitting in their tanks, there is a real limitation to the percentage of the 2021 harvest they can process...