Ad ban will hurt online wine retail

Tuesday, 29 October, 2013
Ryan Sowray, BDLive
A letter from the CEO of to BDLive.
I write to you about a set of regulations that could put all online wine sales portals out of business.

As you know, Health Minister Aaron Motsoaledi is attempting to push through regulations that will ban the advertising of alcohol. While his intention is good, I, and hundreds in the South African wine industry, do not think the minister has thought about the effect that blanket regulations will have on the wine industry.

We believe the unintended consequences of including South African wine in this ban could be potentially catastrophic for the wine industry and particularly for online retailers.

There are 275,000 people employed by the wine industry, which is a growth industry and one of the top five export revenue earners for South Africa. In addition, the Department of Trade and Industry, South African Tourism and the Department of Agriculture have spent millions promoting South Africa’s wine tourism both internally and to the global tourism market.

It would be a shame if one minister’s attempt to prevent people from excessive drinking results in the collapse of a critical industry and a valuable part of our tourism industry.

The minister’s proposed regulations will not allow any association, company or individual to associate wine with the destination, which will mean the Cape wine routes will need to take down their signage (including those that say "Stellenbosch Wine Route begins here").

The ban will also affect them in the following ways:

• No wine shows to promote South Africa’s best wines will be allowed (includes wine shows like Winex, Cape Wine, etc).

• No wine awards will be allowed, and we all know that this improves the local and global image of our wines.

• Tourism in the Western Cape will be severely affected. Wine estates, hotels, wine route tour guides, restaurateurs and estate farm workers will all be penalised by this regulation, jobs will be lost.

• No industry commentators will be able to talk positively about wine (Christian Eedes, Michael Fridjhon, etc).

• Wine farms will not be allowed to sell their wines online, direct to the public, as websites are considered promotional outlets.

• No online retailers will be allowed to market to wine customers (often the only outlet for the 60%–70% of wines produced in South Africa).

• The farms would not be allowed to communicate to their customers and followers (both here and global) online, on e-mail or social networks.

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