South Africa struggles with too much wine

At first it might not sound like a problem: but at a centuries-old vineyard overlooking South Africa's Drakenstein Mountains they've got too much wine.

Prestigious brands, such as Nederburg, are bottled at the vineyard in Paarl, just outside Cape Town, to be shipped worldwide by major South African exporter Distell.

But amid an abundant harvest and global lockdown restrictions, the shipping can't keep pace, leading to a glut that sits maturing at wine estates.

[Distell chief executive Richard Rushton, saying...] "It's a massive problem, it's a structural problem that could take at least two years to resolve."

Distell chief executive Richard Rushton says there's around 240 million litres of excess wine across the Western Cape, of which Distell accounts for 40 million.

"... and that's wine we have to find ways to either sell or use in different forms in order that we solve a particular problem for the farmer and I guess for the whole industry."

South Africa has seen one of the world's strictest coronavirus lockdowns, including a ban on the sale of alcohol - which was reimposed this week.

Rushton says the bans have stopped them from exporting as well as selling domestically.

In June he told an investor call that the impact on prices could be severe and that the company had lost some of its listings in wine outlets abroad as exports were halted.

"Without those sales we simply had a build up post the harvest season this year, we've had a build up in supply of wine."

Rushton said he hopes online sales will help and Distell has also begun producing alcohol-based sanitizers, as the company grapples with a situation perhaps unprecedented since the founding of the Nederburg estate more than 200 years ago.

Video Transcript

- At first, it might not sound like a problem. But at a centuries-old vineyard overlooking South Africa's Drakenstein Mountains, they've got too much wine. Prestigious brands, such as Nederburg, are bottled at the vineyard in Paarl, just outside Cape Town, to be shipped worldwide by major South African exported Distell. But amid an abundant harvest and global lockdown restrictions, the shipping can't keep pace, leading to a glut that sits maturing at wine estates.

RICHARD RUSHTON: It's a massive problem. It's a structural problem that could take at least two years to resolve.

- Distell Chief Executive Richard Ruston says there's around 240 million liters of excess wine across the Western Cape, of which Distell accounts for 40 million.

RICHARD RUSHTON: And that's wine that we have to find ways to either sell or use in different forms in order that we solve a particular problem for the farmer and I guess for the whole industry.

- South Africa has seen one of the world's strictest coronavirus lockdowns, including a ban on the sale of alcohol, which was reimposed this week. Rushton says the bans have stopped them from exporting as well as selling domestically. In June, he told an investor call that the impact on prices could be severe and that the company had lost some of its listings in wine outlets abroad as exports were halted.

RICHARD RUSHTON: Without those sales, we've simply had a build up. Post the harvest season this year, we've had a build up in supply of wine.

- Rushton said he hopes online sales will help. And Distell has also begun producing alcohol based sanitizers. As the company grapples with a situation perhaps unprecedented since the founding of the Nederburg estate more than 200 years ago.