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Covid-19 and the South African wine industry

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  • Davids, Tracy
  • Vink, Nick
  • Cloete, Kandas

Abstract

South Africa has faced multiple waves of COVID-19 infections since March 2020 with various levels of economic restrictions imposed to control the pandemic’s spread. Such actions included intermittent bans on alcoholic beverage sales, which have had a substantial impact on the wine sector. This purpose of this paper is to quantify this impact, using a partial equilibrium simulation model to separate the direct impact of sales restrictions from the indirect impact of collapsed GDP growth and consequently also consumer spending. In 2020 alone, it points to a reduction in domestic sales and in exports as a result of the pandemic and the efforts to control its spread. The subsequent stock build up induces a prolonged period of weaker prices, and combined with additional actions imposed up to the end of July 2021, cost actors in the industry R3.6 billion in primary gross production value from 2020 to 2027, even without accounting for further value addition between bulk sale and retail value.

Suggested Citation

  • Davids, Tracy & Vink, Nick & Cloete, Kandas, 2021. "Covid-19 and the South African wine industry," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 61(1), September.
    • Handle: RePEc:ags:agreko:348122
    DOI: 10.22004/ag.econ.348122
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    References listed on IDEAS

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    1. Reynolds, Sanri & Meyer, Ferdinand & Cutts, Michela & Vink, Nick, 2009. "Modeling Long-term Commodities: the Development of a Simulation Model for the South African Wine Industry within a Partial Equilibrium Framework," Journal of Wine Economics, Cambridge University Press, vol. 4(2), pages 201-218, January.
    2. Piermartini, Roberta & Teh, Robert, 2005. "Demystifying modelling methods for trade policy," WTO Discussion Papers 10, World Trade Organization (WTO), Economic Research and Statistics Division.
    3. van Tongeren, Frank & van Meijl, Hans & Surry, Yves, 2001. "Global models applied to agricultural and trade policies: a review and assessment," Agricultural Economics, Blackwell, vol. 26(2), pages 149-172, November.
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    Cited by:

    1. Ferdinand Meyer & Johann Kirsten & Tracy Davids & Marion Delport & Hester Vermeulen & Wandile Sihlobo & Lucia Anelich, 2022. "A sector-wide review of the COVID-19 impact on the South African agricultural sector during 2020–21," Agrekon, Taylor & Francis Journals, vol. 61(1), pages 3-20, January.
    2. Jana-Mart van der Merwe & Nick Vink & Kandas Cloete, 2024. "The competitiveness of South African table grape exports in the European markets: Threats from Peru and Chile," Agrekon, Taylor & Francis Journals, vol. 63(1-2), pages 97-112, April.
    3. Balcilar, Mehmet & Sertoglu, Kamil & Agan, Busra, 2022. "The COVID-19 effects on agricultural commodity markets," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 61(3), July.

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