Wages, Revenues, Profits & Sustainability

Wednesday, 26 October, 2016
Michael Fridjhon
The seemingly intractable problems of the South African Wine industry

Most of the country's wine farmers don't live in big mansions while their workers starve.
VinPro research shows that 50% -70% of SA's 3500 grape farms are marginal/under-recovering.

Most of the workers on these farms are poorly paid – for obvious reasons. Nevertheless WIETA  (Wine Industry Ethical Trading Association) offers a degree of protection through its certification system. Despite the comments by trade unionists speaking with a very clear agenda on the Heineman documentary there is no confirmed evidence that a WIETA certified product is in breach of the code of conduct. In addition, following the airing of the documentary, Systembolaget (the Swedish monopoly) has double-checked its own audit.

The strike at Robertson is not by farm workers but by winery workers. Their lowest wages were at R3800 and the offer made by management would have raised these to R4400 – against a demand of over R8k.

Most of the 300 striking workers are doing unskilled work and could be replaced by automation. As a matter of policy, the company has been trying to save jobs. There's a serious risk that these jobs are on the line – and unemployment in the area is at over 50%.

In short, the problem is systemic and fairly intractable.

Improving conditions for workers means upgrading their work – for which training is required. Otherwise low productivity and unskilled work will destroy the business and the work force.

The big game changer would be if the buyers – including and especially the Swedish monopoly – paid more for the wine. I have seen a calculation which shows that Systembolaget's gross profit is 25 times more than the grape grower's.

One solution might be to get the big international buyers involved in funding training programmes to upgrade workers: they certainly have the margins and their contribution would contribute to the quality of life of farm and winery workers and to sustainability within the industry

 

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Michael Fridjhon
Michael Fridjhon

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