Black Economic Empowerment in the South African Wine Industry

Abstract

KWV has been at the centre of the South African Wine Industry since 1918. In July 2004, KWV agreed that a broadly based Black Economic Empowerment (BEE) consortium would acquire 25.1 per cent of the shares of the KWV Group. The South African Wine Industry Trust, whose trustees are nominated by the Minister of Agriculture and Land Affairs and by KWV, facilitated the deal. The agreement has features specific to the wine industry; it is also a milestone and a precedent for black economic empowerment in agriculture. This paper situates the politics of black economic empowerment in the context of the legacies inherited by the wine industry. It examines the complex political processes by which the participants mobilized funds and negotiated decisions to reconcile their objectives and realize their goals. By examining carefully the details of the sequences of events, the paper sheds light on the peculiar features of this case and raises questions about the nature, implications and significance of black economic empowerment in South Africa.

Commercial Agriculture inSouthAfrica since 1994: ‘Natural, Simply Capitalism’

“…The first three deals were in the Western Cape wine industry, and among an earlier wave of acquisitions by BEE investment companies that sprang up after 1994, typically closely linked with senior ANC politicians, their relatives and other associates (see, inter alios , Freund ; Southall ; Marais ). They were also a result of politically extremely complicated, murky and compromised processes of restructuring/‘reform’ of the wine industry (Williams ; du Toit et al. ) .…”

“…KWV is Kooperatiewe WijnmakersVereniging, the historically dominant organization in the wine industry. For a detailed analysis of the KWV–Phetego deal, see Williams (), and further on this, as well as Boschendal – the first corporate BEE deal in the wine industry in 2003 – and the Distell case, du Toit et al. (, 18–21).…”

The political economy of alternative trade: Social and environmental certification in the South African wine industry

“…Only large producers, of which there are few in South Africa, could afford to set aside large tracts of land for conservation; meanwhile, the expansion of the wine industry since 1994 has already destroyed large areas of fynbos. Moreover, the industry is hardly diverse, especially at ownership and managerial levels (Kruger et al, 2006;McEwan and Bek, 2006;Williams, 2005). Farm workers and cellar hands are entirely invisible in BWI promotional literature (Ponte and Ewert 2007).…”

The Dry Plight of Freedom: Commodifying Water in the Western Cape, South Africa

“…Rooted in legacies of slavery, colonialism and apartheid, large‐scale wine and fruit farming are the dominant forms of agriculture dependent upon the exploitation of black 1 labour and mainly controlled by white capital. Since the early 1990s, overlapping and contradictory processes of economic liberalization, progressive labour legislation, and land reform have dramatically restructured the institutional arrangements and practices of the wine and fruit industries (du Toit and Ewert 2002; Williams 2005). These processes have produced deeply gendered and racialized class outcomes as women and black African workers disproportionately make up what has become a highly casualized and seasonal labour force caught in a constant struggle to secure viable livelihoods (Ewert and du Toit 2005).…”