Fewer bottles for Germany
Power outages threaten South Africa’s wine exports
8/12/2023 7:36 am
The state energy supplier in South Africa switches off the electricity almost every day – sometimes for up to twelve hours. This is devastating for wine production. The industry association assumes a significant decline in the harvest. German wine drinkers will notice that too.
South Africa’s more than 300-year-old wine industry is suffering severely from the power outages that have been going on in the country for months. “The outages are affecting every phase of production, from irrigation to refrigeration, bottling and labelling,” said Maryna Calow, spokeswoman for the Wines of South Africa industry organization. The 2023 harvest is expected to be 14 percent lower than in the previous year. The organization expects 1.5 million tons less grapes than in 2022.
Although South Africa is one of the economically strongest countries in Africa, there have been electricity blackouts lasting four to twelve hours every day for almost a year. In February, South Africa’s President Cyril Ramaphosa declared a disaster for the country of 60 million people at the southern tip of the continent because of the massive energy crisis.
South Africa is rich in coal and, despite climate change, still relies for almost 80 percent of its energy production on its outdated and poorly maintained coal-fired power plants, which are increasingly prone to failure. The state electricity supplier Eskom has been accused of corruption and mismanagement. In addition, Eskom is highly indebted with the equivalent of around 25 billion euros.
Third major economic hit for the industry
Because wine production is very time-sensitive, even short breaks in refrigeration could affect the quality of the grapes, Calow said. The frequent interruptions in watering the vines also have a negative effect on the quantity and quality of the harvest. Many winegrowers would have had to invest large sums in solar systems or diesel generators; numerous producers would have had to take out loans for this, according to Calow. Unlike in Europe, the wine industry in South Africa is hardly subsidized by the state. “The financial situation in the industry is extremely tight. The costs are enormous.”
According to the International Organization of Vine and Wine, South Africa is one of the ten largest wine exporting nations in the world. The Cape State was the eighth largest producer and the sixth largest exporter by volume. According to the industry organization, South Africa exported wine worth R9.9 billion (EUR 476 million) last year, including wine worth R1 billion (EUR 48 million) to Germany.
The blackouts are the third major economic hit affecting South Africa’s winegrowers. A protracted drought from 2015 to 2018 led to low harvest volumes up to and including 2019. The corona pandemic then caused severe sales slumps in 2020 and 2021. Power outages have been affecting business since 2022. An end to the so-called “load shedding” or “load shedding” is currently not in sight in South Africa.