Business Report Economy

Wine maker should cork the haggling over price and follow its political will

Published

Cape Town - Last week I stood in a cathedral and was in awe! I know cathedrals inspire that. One need only look upwards to admire the majesty of the place.

Yet this was a different cathedral. It was the KWV Cathedral Cellar close to its head office, La Concorde, in Paarl.

It is in the basement of the cellar in which the iconic Perold, South Africa's own Opus 1, matures in oak barrels.

The magic of Cathedral Cellar is not only in its vaulted ceiling but in its carved French oak barrels, which hold 12 000 litres of wine. They were carved in 1969 and 1970 by German father-and-son team Karl and Karl-Heinz Wilhelm. The smaller 5 000l barrels are stacked near the ceiling.

It is also in this cellar that some of the other KWV brands, Cathedral Cellar, Roberts Rock, Pearly Bay, KWV Reserve and Roodeberg mature.

It is these brands that will shortly be launched onto the local and southern African markets. The launch is, according to Lourens Jonker, the recently retired chairman, part of KWV's completion of its own Great Trek.

It was after all Jonker who was the chief architect in the transformation of KWV from a co-operative to a commercial company.

In 1918 Western Cape wine farmers led by Charles Kohler, founded the Koöperatieve Wijnbouwers Vereniging van Zuid-Afrika (KWV).

Their aim was to overcome the oppressive constraints on wine surpluses and the exploitation of contractors. They wanted to improve co-operation and raise the quality of South African wine and brandy.

General-turned-prime minister Jan Smuts was lobbied to pilot legislation through parliament.

KWV acquired the distillery and cellars from the SA Motor Fuel Supply Company near Paarl Station to begin construction of new cellars to store brandy and spirits.

Depots were established in Stellenbosch, Worcester, Montagu and Robertson.

In 1927 Abraham Perold, the father of Pinotage, became KWV's chief oenologist. Today the brand's iconic red carries his name.

In 1961, Stein, Riesling and Late Vintage were prepared by KWV's new German cellar master Willi Hacker using cold, controlled fermentation techniques. Wine courses for the public were started.

KWV helped fund the building of a complex for viticulture and oenological research at Nietvoorbij near Stellenbosch.

Phenomenal changes happened in the wine industry. For one, KWV's chief executive, Jean de Villiers, advocated the European principle of wine and beer sales in restaurants.

Following entreaties initiated by KWV, the restrictive practices that abolished the sales of "whites man's liquor" to black, Asian and coloured South Africans were lifted.

In later years KWV, with Pietman Hugo as chairman, played a pivotal role in the formation of the Brandy Foundation. Joint funding by KWV and the wholesale trade saw the establishment of the Cape Wine and Spirits Educational Trust with the title Cape Wine Master being the highest qualification.

In 1993 KWV celebrated its 75th anniversary and released a limited quantity of its 1975 Red Muscadel to the local market. It also received the state president's export award that year.

With the advent of democracy in 1994 local wines entered the global market. To meet this challenge KWV invested heavily in new wine pressing cellars.

Kosie Möller, the cellar master at the time, earned international recognition particularly for the new flagship Cathedral Cellar range, which received numerous trophies and gold medals at international wine shows throughout the nineties.

In 1996 Jonker and Willem Barnard, the managing director, started the Great Trek from co-operative to company, to complete it a year later when the co-op members became shareholders.

As a trade-off with the government KWV agreed to pay R337 million over 10 years into the local wine industry trust, which was set up for the benefit of farm workers.

The trust has control over two section 21 companies, Business Company and Development Company.

In December 2002, following roadshows, pleading by management, cries of "boere verneukery" by farmers, cajoling and tough negotiations, the KWV Group was split into two separate organisations, VinPro, which would look after the interest of wine makers, and KWV.

The company's shares were made available to the public for the first time in January last year.

KWV again finds itself at a crossroads. It has agreed to sell a 25.1 percent stake to a black economic empowerment consortium and the two sides are haggling over the price.

For Nosey Petersen, the president of an industry-wide organisation called the Black Association of Wine and Spirits Industry, the political will is there to complete the proposed deal.

If it does, KWV would become a truly great South African institution. - Ronnie Morris