Black Economic Empowerment: Meerlust

19th January 2019

Tags: South Africa, politics, economics

One of the key issues in South Africa is Black Economic Empowerment (BEE).  Giving the majority population the vote was not enough, they must have access to economic power as well, or they will remain forever impoverished.  You only need to travel a little out of Cape Town to get the significance of this as you pass black townships which include areas of dilapidated buildings constructed higgledy-piggledy from little more than cardboard and corrugated iron.  On my first day the GPS in the car I’ve hired goes haywire and insists on driving me round one of the townships.  It’s not as dire as some, but – conscious that I don’t really have the experience of how to negotiate my life around here, I still make strenuous efforts not to stop the car.

BEE began with ideas of opening up businesses to shared ownership with black and coloured people (the recognised term for non-white people who do not belong to the indigenous African communities or who are mixed race).  It’s a great idea and worked well in some places.  Often, however, the new owners would take a stake in the business, it would prosper, they would cash in their share (maybe by selling to white or international stakeholders) and leave rich.  It made some of the majority population very rich – but didn’t open up a continuing form of empowerment to most of the people.  There is now the idea of ‘once transformed always transformed’ which is about permanent BEE within businesses, and BEE is to be limited to one event per company.

Others have taken a more long-term route.  I visit Meerlust, just outside Cape Town, to talk to the winemaker there Chris Williams.  He underlines (and it is true) how the winery has a long tradition of trying to improve conditions for their black employees and their families.  The also usually have five or six young blacks being ‘prepared for bigger things’.  The trouble is that often when they are trained they are poached (including to non-wine businesses!)  So there is affirmative action, but it isn’t always beneficial to those who pursue it.

Chris also tells me that the company, together with two other wine producers (Vriesenhof and Ken Forester) has set up a storage, bottling, labelling and distribution business called Compagniesdrift, based just down the road from the winery, which is 50% owned by the black workers there.  It is also now making wine under its own label.  The business has won an award for the best BEE company in South Africa.

If you give land to the disempowered, it takes a long time to plant, then to harvest grapes, and produce and market wine – so there is a bigger chance of failure.  Which leads neatly into the current hot topic of land rights.