Exploring the Impact of South Africa’s Power Outages on the Wine Industry

Peter Pentz is happy about the vineyard’s harvest but worries about the future

South Africans struggle daily with crippling power outages that impose huge costs on businesses. As the country’s grape harvest gets underway, there are concerns about the impact on the wine industry.

The rumble of the tractors, the churning of the wine press and the occasional laughter of the farmhands provide the soundtrack to the busiest time of the year for the Groote Post Winery.

Everyone is active when the harvesting and processing of the grapes begins at this winery in the picturesque town of Darling, less than 80 km (50 miles) from Cape Town in the west of the country.

Dark Pinot Noir grapes are stacked on wooden pallets next to the wine press. A forklift tips a pallet into the press, spreading a sweet smell into the air. I taste a grape smaller than the supermarket varieties and much sweeter and full of bold flavor.

“In 16 months, those grapes will be in your glass and you’ll be sipping a delicious bubbly,” says Peter Pentz, communications manager at Groote Post.

And while that may be true, the winemaker will have a harder time bringing it to the table in South Africa.

The difficulty for any company in the industry is that this crucial time of year coincides with the worst power outages the country has ever seen.

In 2023 not a day will go by without a power outage from the state energy supplier Eskom. The interrupted power supply has a major impact on those who want to make wine.

“As soon as the power goes out, that means [without a generator] none of the operations can continue inside the basement,” Mr Pentz told the BBC.

“No labeling is allowed to continue, no bottling and [no] Cooling. Especially during the harvest season, it is important for us to get the fermentation process going.”

The pressing and fermentation process depend on a regular power supply

This winery, like many others in the area, was forced to invest in a replacement generator, but the exorbitant price of diesel is driving up costs and making it difficult for small and medium-sized wineries to survive.

Groote Post spends about 50,000 rand ($2,800; £2,400) a month on diesel for its generator, and the farm has to spend even more on fuel for its tractors.

This is representative of the additional costs faced by an industry with big growth ambitions.

South Africa is the eighth largest wine producer in the world, generating approximately $3 billion in sales each year.

Around half of the wine produced in the country is exported to overseas markets, with British drinkers being the largest consumers of South African wine.

Many wineries are exploring opportunities in Asia – exports to China, for example, have seen double-digit growth in recent years.

But the constant power cuts diminish the growth forecasts.

The effects can be felt in all areas of the economy. According to global auditing firm PwC, South Africa’s economy could have grown by around 7% last year – instead of less than 2% – had it not been for “load shedding,” as the power outages are popularly known.

“This is a challenge for us, in fact it is a crisis for us,” says Christo Conradie, manager of the wine business at Vinpro, which represents nearly 2,600 wine producers and sellers.

“Electricity is important for our growers because we have to irrigate, especially at this time of year we look at the ripening of the berries.

“That’s why we have to have it [power] and now we’re stuck with Eskom, which can’t deliver optimally,” adds Mr. Conradie.

Although the power crisis in South Africa is not new, the problems seem to be getting worse.

The country has a fleet of old and inefficient coal-fired power plants that constantly fail. There are two new power plants, but they are not yet operational and are massively over budget.

Eskom is expected to enforce continuous load shedding over the next two years as it works on a plan to pull the country out of the crisis.

The wine industry is not passive in its criticism of load shedding. Representatives are in talks with the government and have put proposals on the table.

Mr Conradie says they’ve created a timetable for when winemakers need power most – typically in the early hours of the morning and just after lunch – and asked to plan for blackouts around them.

The industry is also keen to see diesel fuel rebates and government cuts in red tape to allow more investment in solar and other alternative energy sources.

Man working in the back of a truck

Load shedding during harvest time will exacerbate the situation for beleaguered winemakers who have stumbled from one crisis to another.

The wine industry had only just begun to make a comeback after a difficult period during the Covid-19 pandemic. The sale of alcohol was banned in South Africa during the height of the public health emergency and domestic wine sales fell by 20%.

This year’s harvest is expected to be lower than that of 2022 due to unfavorable weather conditions early in the season.

To try to alleviate some of the pressures, the Department of Agriculture last month deployed a task team to monitor the impact of load shedding.

“Technical work to measure financial costs is underway and will help underpin the strategy,” says department spokesman Reggie Ngcobo.

But when this strategy will emerge is hard to know.

Nevertheless, despite the challenges, the work at the Groote Post vineyard continues.

There’s a resilience and a defiant optimism. Mr. Pentz takes pride in the wines they produce and the way they are able to touch different parts of the world.

Holding up a fat bunch of grapes, he says proudly: “It’s amazing to think that we start with this and end up with someone somewhere in the world sipping some South African grapes.”

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