Red and white, made by blacks

SUN JOURNAL

Enterprise: South Africa's wine industry is opening up to nonwhite owners and investors.

August 01, 2004|By John Murphy | John Murphy,SUN FOREIGN STAFF

ELGIN VALLEY, South Africa - When South Africa held its first fully democratic elections in 1994, Patrick Kraukamp, a black day laborer, was just starting a job as a forklift driver at the Paul Cluver wine estate in this lush mountain valley.

Ten years later, Kraukamp still drives a forklift from time to time. But now many of the casks of Chardonnay, Pinot Noir and Cabernet Sauvignon he shuttles between the cool storage rooms of the vineyard warehouse are of his own making.

Sold under the Thandi label - a Xhosa word meaning love - Kraukamp's award-winning wines are shipped to supermarket shelves across South Africa, England and Japan and will soon be appearing in the United States. Sales are still modest, although they continue to grow each year.

"I'm still learning," says Kraukamp, a humble, soft-spoken 37-year-old dressed in blue coveralls and red wine-stained work boots who has been training as a winemaker for seven years. "You take it step by step."

After more than 300 years of white domination, South Africa's wine industry is on the brink of a transformation to redress past injustices.

During the colonial era and apartheid years, South Africa's vineyards often abused their black and mixed-race workers, exploiting them with meager wages, horrid living conditions and the "dop" system, a practice whereby workers were given wine in lieu of pay. The system led to rampant alcoholism and helped contribute to South Africa's having one of the highest rates of fetal alcohol syndrome in the world.

The end of apartheid created new opportunities for South African wines, long shut off from the outside world because of sanctions. The wines have improved in quality and won favor at restaurants and dinner tables in Europe and America, making South Africa the world's eighth-largest wine producer. Exports have increased a hundredfold since 1994, with more than 237 million liters exported last year.

Despite these newfound fortunes, the industry did little to open up to nonwhite owners and investors.

But now South African winemakers are vowing to make amends for their past sins and to share their wealth with the underprivileged.

Under plans being drafted by the South African government, the wine industry will be called on to include greater black participation, perhaps requiring 25 percent to be the hands of black shareholders by 2014.

How the industry will transform itself is still not clear. In recent years, South Africa winegrowers made a number of high-profile efforts to create black-owned wineries, sell shares, donate land or join partnerships with their workers. But most of these enterprises have failed to lift workers out of poverty.

In hindsight, industry leaders say, these so-called empowerment projects often lacked good business plans, management or capital.

In the excitement surrounding Nelson Mandela's election as the country's first black president, many wineries rushed to market "empowerment" wines and featured their black farm workers on the labels, says Su Birch, chief executive of the South African wine producers and exporters association, Wines of South Africa. But the wines were often of low quality, and sales slumped. Vineyard workers soon grew embittered when they realized that despite owning a share in a wine venture, their quality of life had not improved.

"It was a disaster," Birch says.

After a recent survey of about a dozen empowerment projects, Nick Vink, head of the department of agricultural economics at the University of Stellenbosch, said, "Some of the early ones were window dressing more than anything else. ... It was not real empowerment."

But there are some exceptions.

Most successful, says Vink, have been empowerment projects that focused on attainable goals, such as building homes.

At Fairview Estate, near Paarl, 42 farm workers who lived in estate-owned housing used a government grant to buy 40 acres of land from their employer to build their own houses. To pay for the construction, Fairview helped its workers start their own wine brand called Fair Valley, which produces red and white blends exported to Europe, the United States and Asia. Profits have been used to complete eight spacious three-bedroom homes.

At Thandi winery, Kraukamp and the enterprise's 150 other shareholders have more ambitious goals to create a highly profitable vineyard that will create healthy dividends for years to come. But it will be a long wait, they say, because most profits have been reinvested in the business.

It was only in July that shareholders received their first dividend, about $40. Not much, workers there say, but a start.

Thandi was started in 1996, when Paul Cluver, a retired neurosurgeon and well-known winemaker, formed a partnership with the government to give 500 acres of land to his farm workers and a group of unemployed villagers so they could create their own fruit farming and wine business.

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