- Title: South Africa's Distell battles wine glut amid lockdown disruption
- Date: 14th July 2020
- Summary: CAPE TOWN, SOUTH AFRICA (FILE - FEBRUARY 20, 2020) (REUTERS) VARIOUS OF WINE FARMERS HARVESTING AND PICKING GRAPES AND LOADING THEM INTO TRUCK
- Embargoed: 28th July 2020 13:25
- Keywords: South Africa abundant harvest coronavirus lockdown restrictions wine glut
- Location: JOHANNESBURG AND CAPE TOWN, SOUTH AFRICA
- City: JOHANNESBURG AND CAPE TOWN, SOUTH AFRICA
- Country: South Africa
- Topics: Health/Medicine,Editors' Choice
- Reuters ID: LVA002CMS8K99
- Aspect Ratio: 16:9
- Story Text:At a centuries-old vineyard overlooked by South Africa's Drakenstein mountain, the country's biggest single wine exporter Distell is battling a problem of plenty.
Prestigious wines, such as Nederburg, are bottled at the vineyard in Paarl, just outside Cape Town, and shipped locally and worldwide.
But the shipping can't keep pace with the combined impact of an abundant harvest and lockdown disruption that has led to a glut that sits maturing in French oak barrels or stored in metal vats at wine estates.
South Africa, one of the top 10 wine producers, has around 240 million litres of stock across the industry, said executives at Distell, which itself has 40 million litres.
"It is a massive problem... that could take at least two years to resolve," Distell CEO Richard Rushton said.
He told an investor call in June the impact on prices in the industry could be severe and said the company had lost some of its listings in wine outlets abroad as exports were halted.
South Africa also banned domestic alcohol sales as part of lockdown restrictions begun in March. Early in June it allowed sales during limited trading hours, but President Cyril Ramaphosa reimposed a sales ban from July 13 as new infections surged.
Rushton said Distell hoped online sales would help and it has also begun producing alcohol-based sanitisers.
Even in the best of times, managing wine stocks in finite cellar space requires thinking a few moves ahead, but not usually as many.
He faces a situation unprecedented in his two decades of experience and perhaps since the founding of the Nederburg estate in 1791.
(Production: Mike Hutchings, Shafiek Tassiem, Sisipho Skweyiya) - Copyright Holder: FILE REUTERS (CAN SELL)
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