Comment - Wine - South Africa: The Only Way is Ethics
Today is the first day of Cape Wine, the three-day bi-ennial trade fair for South Africa's wine producers. To mark the event, Chris Losh takes a closer look at the latest move by the country to highlight its ethical credentials.
An increasingly beleaguered wine industry has been short of much to cheer about over the last few years. But this year’s Cape Wine, which runs this week in Cape Town, will see the unveiling of a genuine good news story: the launch of the first South African wines to carry the Wine Industry Ethical Trade Association (WIETA) stamp.
Essentially, the stamp serves as proof that the accredited bottles have come from farms that respect the rights and conditions of their workers: elements such as not using child labour, ensuring all working environments are healthy and safe, that all get a living wage and that housing and tenure security rights are respected.
You might, of course, wonder why it’s taken almost 20 years from the country’s first free elections for the industry to act on safeguarding such fundamentals.
But, the WIETA stamp was already underway ten years ago, but seems to have become bedevilled by political machinations, infighting and, possibly, a certain amount of foot-dragging since then.
So, why the new-found enthusiasm?
The answer is, probably, at least in part due to a critical Human Rights Watch report, published a year ago, into worker conditions on some fruit farms in the Cape.
The report was not focused on wine, but the industry found itself caught in the fallout and having to answer some pretty awkward questions from key export markets such as Sweden and the UK, who were dismayed to discover that that the country had not, as they thought, got its house in order when it came to workers’ rights.
It was, as Su Birch, CEO of Wines of South Africa (WoSA) says, a defining moment. "We needed to draw a line in the sand," she says. "We couldn’t have a situation where some farmers were dragging the whole industry down."
Market disapproval, in other words, breathed new life into WIETA.
There is, of course, national legislation governing pretty much all of the areas already addressed by WIETA. But, the government has shown little stomach for enforcing them, and workers, understandably, tend not to complain too loudly to their paymasters.
The attractions of WIETA are a) that it gathers all the relevant legislation into one easily-understandable package, and b) that this is not simply the wine industry policing itself, but that workers’ unions and NGOs are on board too.
If dealing with WIETA is, as one insider wryly put it, "challenging", then the body's presence also gives the programme teeth, ensuring neutrality and preventing the wineries from skirting inconvenient issues.
With over 3,500 growers in the Cape, and nearly 600 wineries, auditing them all is clearly a slow process. But, the plans are ambitious. Aided by the fact that all the big players seem to be on board, if all goes according to plan, over 60% of the region’s wines will be WIETA-accredited by the end of next year. And, the industry is expecting 100% compliance by 2016, which, only five years after the Human Rights Watch report, would be some achievement.
While the administration costs of running WIETA are funded by WoSA, the auditing costs must be borne by each individual winery. But, foreign pressure should ensure compliance. The likes of Sweden’s Systembolaget, for instance, have already intimated that they might soon only deal with ethically-certified wineries.
One side-issue to all this is where it leaves the country’s ZAR70m (US$8.6m) Fairtrade wine industry. Proponents of Fairtrade argue that it has been going for 25 years, accounts for sales of 250,000 bottles a year, and that introducing a new ethical classification will only confuse consumers or, worse, dilute the Fairtrade message.
In fact, while there is some cross-over - Fairtrade-accredited wineries don’t need a further audit to gain WIETA status – the two have very different intentions.
Fairtrade projects are specific to each winery, and aimed very definitely at reviving and empowering communities. Wineries pay growers a premium for the grapes, and money goes back into community projects.
It’s unimpeachably rigorous and well-intentioned, and more ambitious in its scope. But compliance is complicated and requires a serious commitment – not least, until recently, a change in ownership to recognise the black majority, a dilution that is an understandable disincentive.
WIETA, meanwhile, is cheaper, simpler and wider but less deep in scope; a speedy attempt to provide the entire industry with, if you like, a basic, verifiable code of practice that is built around local laws and wine industry realities (such as the housing issue).
The biggest difference, however, could be that, according to WoSA’s Birch, it isn’t even aimed at consumers.
"It’s a guarantee for the [trade] buyer," she says. "It gives moral weight and protects [the trade buyers] from exposure."
If there’s a hint of unease about the way in which this new shining beacon of justice seems to be being lit for the benefit of powerful buyers as much as powerless workers, it shouldn’t detract from the fact that the light is, at least, reaching into all corners of the industry.
"We’re pushing our wineries, and they’re going back to their farmers," says James Reed from Accolade Wines' South African operations. "There’s a real trickle-down effect."
If the pressure continues to be applied from abroad by, among others, Tesco, the goal of 100% WIETA-compliance in three years looks eminently attainable, which would, whether it’s intended for consumers or not, give the country a powerful USP.
I wonder whether Chile or Argentina, for instance, would have the courage to follow suit?
There’s only one caveat to this good news story: that WIETA might damage Fairtrade, with retailers using WIETA as a way to delist the often more expensive Fairtrade wines and stock cheaper alternatives with the new classification.
This would be wrong.
WIETA, you could argue, is the industry belatedly enforcing basic rights that it should have got its head round 20 years ago; Fairtrade is a difficult, complicated, massive commitment aimed at reinvigorating entire communities through selling wine.
It would be a terrible irony if this more ambitious goal were to be undermined by a parallel initiative, however laudable.
- Analysis - Remy's Cognac "dead-cat bounce"
- Comment - How Hand-Made is Tito's Handmade Vodka?
- Heineken to stay "active player" in beer M&A - CFO
- Diageo's future brighter than present suggests
- Focus - Pernod Ricard's Q1 sales by brand
- Moët Hennessy unveils first Travel Retail outlet
- United Spirits sees Q1 net loss
- Beam Suntory, Edrington part ways in Travel Retail
- Diageo puts Beckham centre stage in Haig Club ad
- Smirnoff Ice gets India launch