Reassessing the wine industry in wake of strikes (by Mike Froud)

Posted: January 24, 2013 by wynmaker in Cellars, Farms, Labour, South Africa, Wine, Wineries, World wine news
Tags: , , , , , , , , , , , , , , , , , , , , , , , , ,
(image courtesy of Aletta Gardner/EWN)

(image courtesy of Aletta Gardner/EWN)

 

As the smoke clears after the unrest in various fruit-growing areas of the Western Cape, and with the next round of protests demanding higher wages for farm labourers and seasonal pickers on its way, the South African wine industry is weighing up the implications to its business model and to the way of life for many among the vineyards.

 

To date, the strike for an increase in the minimum wage from R69 to R150 a day – which has involved the intimidation of farmers and their full-time employees, looting, the destruction of property and the loss of life – has largely been confined to fruit farms that do not produce grapes for making wine.

But with cellars gearing up for the 2013 harvest and the pay dispute apparently no closer to resolution than it was when violence broke out in De Doorns, Wolseley, Grabouw and elsewhere last year, it seems inevitable that more wine farms – especially those using part-time workers – will soon become the focus of attention for the strike leaders as well as the political and criminal factions seeking to gain from the protests.

Should the wine grape harvest this year be seriously disrupted, it is a very real possibility that some farmers could go out of business.

Many will be among those whose only source of income comes from the grapes they sell to wine producers and whose business model revolves around low prices and large tonnage. Others up against the wall will be those making or selling wine whose success hinges more on offering the best prices than it does on the best quality, and who operate in sectors of the market where branding is not a factor.

On the other hand, the South African wine industry also comprises large corporations as well as a number of private wine farm owners with the means to weather the storm.

Many of these stakeholders are already paying way better than the minimum wage while providing their staff with decent accommodation and more, such as crèche and church facilities.

But of as much concern to these stakeholders as the cost implications of having to pay more to their workers or hiring fewer people and opting for increased mechanisation is the straining of the relationships they have with the farm hands and how to embrace a business model revolving more around quality and branding rather than tending to play the price card.

 

Read on …
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