What is happening in the transformation space?
12 September 2015
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Brad Brown: Welcome back onto this edition of Old Mutual Live, great things start her, great things start now. It’s an absolute pleasure to welcome our next guest onto the podcast. He is no stranger to the wine industry doing some amazing things. He’s the transformation and development manager at VinPro, Phil Bowes. Welcome onto Old Mutual Live. Thank you for joining us today. Much appreciated.
Phil Bowes: Thank you very much.
BB: Phil great to touch base. I mean the wine industry in South Africa is really, really growing and that comes with its own set of challenges and that’s where you at VinPro come in. You’re trying to do things the right way aren’t you?
PB: Absolutely. What we try to do is seek opportunities, not only in enterprise development but also within the ranks of employees of the industry.
BB: Because the truth of the matter is everyone needs to benefit in this growth and South African wine is on the up. What’s currently been done in the wine industry with regards to transformation, for example corporate social investment, BEE projects and those sort of things?
Is transformation taking place?
PB: Well if we take the employment or the employee ranks in the South African wine and brandy industries, you currently have around 290 000 people employed. The industry’s labour to capital ratio, well that’s meaning the number of jobs created per 100 million invested is at 4.64 million which exceeds the agricultural average of 4.54 million. As well as that of the national economy of 2.94 million which is pretty, well it’s the nature of intensive farming.
But now in keeping with approval of levy funding which you have from the Minister of Agriculture, the act requires the industry to spend at least 20% of the funding which we levied from producers on the transformation initiatives so there are various different kinds of initiatives that we invest in with that 20% levy but then with our own savings as well.
So ethical trade is one area which is one of the common internationally understood areas that we would class under transformation and under that we’re proud to have the best ethical trade brand at the moment in the world in one of our producers.
But then also South Africa produces 60% of all wines sold globally under the ethical, under the Fair Trade label. That’s the fair trade label. We’ve got WITA which is a home-grown industry ethical trade initiative. WITA makes sure through independent audits that our wine producers anchored in the ambit of the law and a little more than that too.
Fair trade is helping uplift people’s lives
More than 40% of South African wine producers are audited according to internationally aligned ethical standards. Our social investment, expenditure runs it around 38 million, about 232 corporate social initiative projects. Child development and after school facilities supported about 64, life skills training and counselling initiatives about 33; and then of course housing, farm worker development, basic health care, sports and cultural activities are some of the other initiatives of the industry seeks to invest in.
It doesn’t only necessarily just make sense for business but also to make people’s lives better and more enjoyable in a traditionally difficult level of employment. The Foundation for Alcohol Related Research or FAAR has invested R1.2 million in 369 people who have been involved in intensive rehabilitation programmes.
In terms of training some of the really meaningful industry efforts include significant investment and training with about 2 600 billion and 300 cellar workers at national qualification framework one level every year.
Apart from formal education, new entrants in the world of viticulture and technology also trained and mentored through inter alia the Pinotage Group Development Academy and then of course the Cape Wine Maker’s Guild Protégée Programme.
Now it’s important to understand this in that we want to see succession through the ranks of the wine industry and we often see that demonstrated really well on many of the estates. Of course some producers or some farmers or some estates are better than other at this but where we want to be involved as an industry, is to see someone enter the workplace perhaps at a certain level and then get to another level higher up, management and control-wise and that for us is really important.
What’s the response been like from the industry?
BB: As far as, you mentioned that some of the manufacturers and producers are slightly better at this than others, what’s the response like generally within the industry from producers to this?
PB: Well, I think some it in some cases it’s not always necessarily the response one would like because in many other countries economic development initiatives are economic development focused and seen as such. Whereas in South Africa sometimes unfortunately you have polarisation around the themes of transformation because some might feel as though they’re going to become marginalised in the future.
But what we find though is that many producers who get it, who understand it, who figure this out early that it makes sense especially from an ethical trading perspective. Then from a compliance perspective also, if they get stuck in and they make sure that they affect some of the change we’re looking for.
BB: It is interesting indeed. Phil what I’m going to do, there’s a big segment that I want to chat to you about and that’s enterprise development when it comes to transformation. That, I think let’s save for another edition of this podcast.
I think it’s something that needs to stand alone and we can really dig deep into that and find out what VinPro is doing in that space but we’ll save that for another day. Thank you so much for your time today, much appreciated. We look forward to catching up again soon.
PB: Only a pleasure. Thank you.