DGB executives put their pockets on the line in Covid-19 crisis

Friday, 3 April, 2020
DGB has reinforced its absolute commitment to ensuring the group and its suppliers get through the current Covid-19 crisis by requesting its senior executives to agree to a three-month pay cut.

In a regular memo to staff, DGB's CEO Tim Hutchinson said that his agreeing to taking a 50% decrease in salary was followed by the company's senior executive management unilaterally supporting the proposal to have their salaries reduced by 25% for the months of April, May and June.

“Like most sectors of the South African and global economy, DGB is taking tremendous strain during the current pandemic,” said Hutchinson. “As a significant player in the wine and spirits sector, we are paying a huge price as the restaurant and hospitality sector has been in decline since December due the recession. To add to these woes, in the last month, consumers stopped frequenting on consumption outlets. And now to crown it all we have the complete shutdown of our total business.”

As an added blow, DGB’s wine exports have ground to a halt as a result of government regulations prohibiting the industry from shipping alcohol products to global markets. Here DGB has built-up a substantial customer-base through leading wine brands such as Boschendal, Bellingham and Douglas Green.

None of the other wine producing countries such as Chile, Spain, Australia, New Zealand have these restrictions on their exports. “So if big supermarkets like Tesco in the UK or Albert Heijnin Europe can’t get our wines, they will order from these countries and South Africa will lose their listings,” said Hutchinson.“Really not what we need now - imagine the loss in foreign currency.”

Hutchinson said that it is essential for big corporates to show solidarity with their staff, suppliers, colleagues and customers.

“Hopefully, we are not seen as fat cats sitting back asking suppliers to assist us with the odd delayed payment to help manage our cash flows without taking a lot of pain ourselves,” he said. “It is important to emphasise the need for us all to hold hands in the spirit of ‘ubuntu’ to get through this crisis together. It’s an uncertain road ahead, but through solidarity we will get over the current crisis, the extent few of those still alive can remember.”

Hutchinson said that the support from DGB staff has been heartening. “Our people have truly bought into our goal to navigate DGB through this crisis between now and the end of July,” he said. “All our staff have to be looked after during this period and after the crisis is over we will all strive to build DGB into an even stronger and better business globally.”

“Every South African must get behind the President’s shut down strategy and we will all have to make sacrifices if we are going to get through this pandemic. I must thank everyone in DGB for the long hours and hard work put in during the last two weeks to draw up and implement all our contingency plans.

“The DGB executive team have all been very busy discussing and implementing shutdown plans and strategies with industry forums, staff, shareholders, suppliers, brand owners, customers and our banks. The thrust of these discussions has been aimed at seeing how we all hold hands to navigate our businesses through this crisis."

In an earlier announcement, DGB said it had arranged for its Red Rock Brewery in Johannesburg to break-down 80 000 litres of alcohol for use as hand-sanitiser.