Michael Fridjhon: Where to for VinPro?
By Michael Fridjhon, 24 January 2018
I suspect it’s a thankless task trying to run VinPro, the wine producers’ representative body. For a start, you are dealing with literally thousands of members, some with mom-and-pop plantings, others with hundreds of hectares under vines. Some are businesslike, others are weekend gardeners, most are cash-constrained, and not a few are needy. Short of the job as the chief electoral officer of the ANC, there isn’t a position I’d be less likely to apply for.
Among the difficulties anyone trying to herd this flock of cats is likely to encounter are the different agendas of the members, the alienation of the national government from agriculture (and more particularly, viticulture) and the conflict between short-term needs and long-term goals in an industry with the turnaround time of the Titanic. We know that vineyard land is shrinking for economic reasons, even before the impact of the drought is taken into account. We know that most producers are not recouping enough at current fruit prices to afford to replanting costs. We know that farm killings make agriculture less-than-attractive even to that class of individuals who understand (and love) what it means to work the land. We also know that the pure production sector suffers from the weakest negotiating nexus in the value chain.
So what would you do if you were handed this poisoned chalice? You would quickly have to make some uncomfortable decisions around what can be, and what cannot be changed. You would have to acknowledge that the attrition of the marginal producers is both a Darwinian necessity as well as a political and economic reality. This means accepting that the Cape wine industry will see a further fall in plantings, bottoming at around 80000 hectares – at least 20000 off their peak of the past twenty years. You can’t waste your efforts rescuing those who are too far under water to ever be functional even if you can bring them to the surface.
Then you would have to decide whether your job is to look after the grape growers, or the wine producers: you can’t do both, and one of the problems that partly neutralises VinPro’s efforts is that in the absence of a strong producer body, it attempts to serve both constituencies. At the 2017 VinPro day growers’ representatives engaged quite abusively with the CEO of Distell – seeing in those who process grapes or buy bulk wine and then use their brands to get the product to market a reason for the low fruit prices. At one level this is indeed what happens: grocers screw grocery suppliers, car manufacturers beat down component suppliers, the Guptas use their politically-infused buying power to secure backhanders. Vinpro can’t play both sides of the game, and since the organsiation is there for the farmers, it shouldn’t cosy up to their customers.
It’s worth observing that this role has been thrust upon VinPro in the absence of a properly structured industry representative body: just as the growers are weakened as a result of their fragmentation (3500 fruit growers with fewer than 350 customers for their fruit) so is the industry because it cannot present a united front. Leaving VinPro to lobby the national government on its own is like sending Jeremy Clarkson to negotiate with the authorities for a higher speed limit: no matter how sound the arguments, they will always be contaminated because of the implied agenda.
VinPro can never propose a better deal for farm workers – not without alienating its members – so it can never come to government and claim to be serving the interests of labour. It’s also not in a position to argue for meaningful transformation: everything from land ownership to mandatory worker training to employee empowerment is too far down its members’ list of priorities for VinPro’s management even to put onto an agenda. A streamlined VinPro could be more focused in saving the agricultural side of wine production. It would have something to barter with the producing wholesalers. It could approach government in a more focused way.
What it can do is help to get a strong and functional producer organisation up and running and then leave it to function on its own. This means giving up the dream of being the industry’s united front, on the way making itself more effective by being less conflicted. That way, it will also have more time to save old vines instead of leaving this hugely important campaign to philanthropic investment – which, while generous, has only an emotional rather than a material interest in the cause. It will have a better chance of securing water rights where they are most needed, directing research towards viticulture rather than oenology, improving fruit quality and driving up average grape prices. It will also be in a better position to ensure that the highly successful bulk wine exporters – arch exponents of divide-and-rule strategies – do not make the erosion of the margins of individual growers the primary source of their profits.
Can this be achieved? Not easily, but I think that a VinPro modelled on this blueprint has a vastly better chance of success than the current portmanteau organisation. It will save some of the vineyards that are destined for destruction, as well as the most efficient farmers and more of the properties sited in areas best suited to quality viticulture. Will it happen? That depends on whether the most politically effective grouping of growers sees value in the trade-off, and the leadership embraces the opportunity this presents in preference to clinging to the wreckage.
- Michael Fridjhon has over thirty-five years’ experience in the liquor industry. He is founder of Winewizard.co.za and holds various positions including: Visiting Professor of Wine Business at the University of Cape Town; founder and director of WineX – the largest consumer wine show in the Southern Hemisphere and chairman of The Old Mutual Trophy Wine Show.