A black manufacturing co-operative turned the wine industry on its head when it beat off the challenge of well-established traditional producers to secure lucrative deals to supply China and India with wine, and is now hoping to partner with small suppliers to meet the demand.
Malcolm Green, deputy chairperson of African Vintners Alliance (AVA) Co-operative, signed memorandums of understanding on behalf of its 14 members during the third co-operative meeting where leaders of co-operative organisations from Brazil, Russia, India, China and South Africa (Brics) gathered in Cape Town recently.
AVA’s members represent small businesses that are black-owned and black-empowered and range from new companies to sophisticated entities. Its products are sold locally and exported to, among others, the U.S, the U.K and the European Union.
Green paid tribute to the Department of Trade and Industry (DTI), especially Minister Rob Davies and Deputy Minister Elizabeth Thabethe, for their co-ordinated effort in concluding the deals.
AVA will visit India and China in 2014 and once the orders have been secured will put their products together and start exporting. Green feels that it is AVA’s black economic empowerment credentials and its experience in exporting (collectively the members have 90 years of experience in trading) which clinched the deals for them.
“AVA is the only black-owned wine co-operative in South Africa and fits in with the DTI’s transformation agenda to bring more black businesses into the industry.”
He said the DTI also took into account AVA’s export certificates, its logistical experience in loading containers, its affiliation to export agents and freight forwarders, as well as its connections with clearing agents in Brics countries.
The fact that the co-operative traded with products approved and certified by South African wine industry regulators and that all its members are licensed, also played a part.
Would the company be able to deliver on the required volumes?
Says Green: “We envisage that orders will pick up, but we would be able to handle the volumes by buying more wine from our suppliers. AVA already has access to over 40 million litres of wine and is looking to partner with suppliers to access even more. But ultimately AVA hopes to acquire its own farm.”
Green did not want to divulge the value of the deals, but says it would put AVA in a position to be a key player in the wine industry and to run its own factories and to employ more people.
He says another positive spin-off from these deals is that the company would be able to procure dry goods such as labels, capsules and carton from smaller BEE firms, thereby further transforming the industry.
According to Green the biggest challenge for co-operatives across all sectors is access to markets. He says a solution would be to consider putting a trading portal in place where co-operatives would be able to trade their goods.
“We (as AVA members) would be more than happy to offer our expertise and experience to assist government to implement a portal.”
AVA plans to visit Brazil in March 2014.