SOUTH AFRICA – South African retailer Pick n Pay has announced its commitment to purchasing 25 million bottles of wine in 2021 to support the local wine industry.
This comes after the industry body Vinpro reported that the local wine industry has lost more than R7 billion (US$480m) in revenue following the ban on alcohol sales.
The industry faces an unprecedented cash shortage and stock surpluses, as over 300 million litres of unsold wine languishes in warehouses and cellars. This is almost a year’s worth of wine sales.
“There were months during lockdown where we were unable to trade in liquor, and then had restrictions on trading days and hours, so we really understand what the industry is going through.”Head of liquor at Pick n Pay – Gavin Levers
In addition, jobs of over 290 000 employees in the entire value-chain and 40 000 farm and cellar workers are in jeopardy as we move into 2021, African News Agency reports.
As it stands, VinPro is currently estimating that as many as 80 wineries and 350 growers could go under in the next 18 months.
Domestic sales are down 21% and exports steady but not growing, the pressure of over-supply is already forcing prices down in some cases.
Head of liquor at Pick n Pay Gavin Levers said, “There were months during lockdown where we were unable to trade in liquor, and then had restrictions on trading days and hours, so we really understand what the industry is going through.
“Vineyards were lost and many farms are in business rescue, are experiencing cash-flow issues or have excess volumes they simply can’t move fast enough.”
According to the retailer, the effects of the lockdown will be felt for years to come regardless of the easing of alcohol sales in November as winemakers struggle to sell enough wine to make room for new harvests.
“We’re in a perfect position to help our wine estates and we’ll be promoting local wines right across our stores and online,” said Levers.
Levers said Pick n Pay’s wine buyers will be working with wine farms in the coming weeks to help them sell their excess volumes and will launch new ranges in store and online.
“We are inviting wine farms to work with us so we can do what we can to help, and prevent estates from having to close their doors.
“We are making more space available in our stores for local wines and we’re listing more local wines on our online shop. We’ll be backing this up with strong promotions,” said Levers.
Pick n Pay will also use its Smart Shopper free-to-join Wine Club, now with 140,000 wine-loving members in South Africa.
The Wine Club promotes local wineries and producers and offers additional points for buying local wines, unique monthly discounts and exclusive invitations to events.
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