Restaurants reckoning with regulations

Every drop of the wine industry was squeezed by the COVID-19 pandemic.

In Alsace, Marion Bores sent 30% of Domain Bores’ wine production to be boiled down to alcohol for sanitiser. Marion told New York Times writer Adam Nossiter: “It’s like you are saying goodbye to someone who is very dear to you. This is not exactly the destination we had in mind, when we made this wine.”

The impact of COVID in numbers

The coronavirus pandemic had devastating effects on the global wine and restaurant industry. Marthinus Ferreira, internationally renowned chef and owner of DW11-13 says: “We were trading well until the week after Valentine’s Day, then with the news of the first cases and worldwide worries, we slowed down drastically. Then, when booze was not allowed to be served, we went completely dead.”

In order to ensure that as many industries as possible were locked down, and as many people as possible were quarantined, the South African government instituted stringent lockdown regulations. The initial lockdown regulations included impediments on the production, sale and distribution of alcohol. As a result, export sales were halted. According to the Journal of Wine Economics, the export of South African wine declined from US$781 million in 2018 to US$661 million in 2019. South Africa only had a 4% share of global wine exports.

According to wine industry body VinPro, only 28% of South African wine grape producers were profitable in 2019. The pandemic and the inability to trade exacerbated an existing crisis.

Global lockdowns have been regarded as costly. Worldwide, over 400 million jobs were lost by 24 August 2020 and, according to The Wall Street Journal, over 13 million jobs were lost in the United States alone. (The United States, with lax lockdown regulations, had also reported over 190 000 of the over 900 000 global deaths that were attributed to COVID-19.)

Although Massmart was largely able to trade through the lockdown, CEO of Massmart Mitchell Slape says that the restrictions wiped out over R4.6 billion in revenue in the first half of the year and R700 million in profit.

But one has to see the alcohol ban in light of the bigger picture that was the coronavirus pandemic of 2020. Trade of alcohol was halted to give healthcare workers a means to focus on the pandemic. According to CEO of Distell Richard Rushton, 59 cents of every rand generated by alcohol sales goes to excise tax. Even so, Distell’s initial response to the pandemic was to produce sanitiser. Even after trade restrictions were lifted, Richard Rushton said: “We will continue to support low- and no-alcohol products, because it’s the right thing to do and we have seen strong consumer demand and interest.”

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