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[00:00.70] We're looking at the wine industry.
[00:04.85] Yeah, we're looking at two countries whose wine industries have faced two very different problems recently.
[00:10.69] Richard, we're starting with South Africa.
[00:13.08] Tell us about that.
[00:14.15] Yes, well they've been making wine for quite some time, since 1659, and they are the eighth largest wine producer, producing 3.3% of the world's wine.
[00:26.63] Who do they export to?
[00:27.69] Mainly to Europe.
[00:28.76] It's 13% to the UK, 11% to Germany and 3% to France.
[00:35.13] So they're doing quite well.
[00:35.93] Well, as it happens, wine production in South Africa has actually been gradually falling.
[00:42.30] Now it's mainly because of the drought that they've been having over the last few years.
[00:46.82] Right, but for this podcast, we're talking about a specific problem they have now.
[00:54.52] Yes, they have had a specific problem this year, is that they've got a surplus stock of about 300 million litres of wine, which is about 400 million bottles.
[01:04.35] That's a lot. It's about the total wine sales for them for one year.
[01:08.60] So how has that happened?
[01:10.46] I'll give you one guess.
[01:12.05] Covid. Now, South Africa has the most Covid-19 deaths of any African country and the President, he decided to introduce some serious measures and these included the total ban on alcohol sales in the country.
[01:30.38] A complete total ban?
[01:32.77] Yes, the President argued that it was necessary to reduce alcohol-related illnesses and injuries so that hospitals could instead focus just on Covid-19.
[01:42.86] Right, OK. Now, what was the result of that?
[01:46.32] Well, the domestic wine sales decreased by 20% and, of course, exports declined as well because people in Europe were drinking less because of the pandemic.
[01:56.68] And actually, in addition, some winemakers were unable to launch any new products and the industry actually fears a loss of 27,000 jobs across the industry.
[02:08.36] That is 10% of the total workforce of 265,000.
[02:13.41] Not looking good for South Africa then.
[02:16.07] So what's your country then, Jackie?
[02:17.66] Well, the second country produces a lot more than South Africa, between three to four billion bottles of wine.
[02:26.43] That's got to be France, hasn't it?
[02:27.49] Yeah. Now, but interestingly, Richard, over the last few years, the French wine industry too has seen a steady decline.
[02:34.66] And why is that then?
[02:35.72] A number of reasons.
[02:37.05] The US has imposed import taxes on French wine.
[02:40.50] The UK left, so Brexit also caused a problem.
[02:45.82] Sales to the UK dropped.
[02:47.68] And also, interestingly, competition with many New World wines.
[02:53.25] Such as South Africa.
[02:54.58] Well, exactly, exactly.
[02:56.18] Yes, French wine's always more expensive, isn't it?
[02:58.30] But there is now a specific problem.
[03:01.75] At least a third of French wine production, worth almost 2 billion euros, will be lost this year. Wow.
[03:11.32] Is that Covid-related? Not because of Covid.
[03:14.77] Why then? The weather.
[03:16.36] Rare freezing temperatures have devastated many vines across the country.
[03:22.21] But it's not just the bitter frost and ice, which is the worst in decades, Richard.
[03:28.58] But the problem was, it came after a bout of warm weather.
[03:33.10] So the vines started to develop earlier than usual.
[03:38.68] And then they were killed off.
[03:39.74] And then they were killed off by the frost, yeah.
[03:42.13] 80% of vineyards have been affected in France.
[03:46.11] Wow, that's a lot.
[03:47.44] That's a lot, yeah.
[03:48.24] And some areas have lost all of their crops, 100% of their crops, and they don't think they'll produce a single bottle.
[03:56.74] It's been devastating.
[03:58.07] I'm sure. Yeah.
[03:59.13] But, Richard, one wine country has done well.
[04:03.11] No US tariffs, no limits on drinking during Covid and no bad weather.
[04:09.22] Wow, where's that then? Portugal.
