Scrutinising Winex 25 August 2006

Another wine show gets at least one person wondering about the behind-the-scenes situation

From regular correspondent Cassuis:

I had a while to ponder things while frying bigger (non-wine) fish. But I have a few points to raise again – an old topic, but more relevant than ever, especially this time of year.

We have all been well entertained with the Sawit vs Everybody clash: no one understands it, and very few people will ever get to see all the facts and figures. Thus another political mudslinging match with no real victory or result, just a few heads needing to roll.

But this topic has silenced a issue that’s on many minds.  It’s Winex time.... Less than three months ago, legal hoopla saw the Winex masters claiming that the Joburg Wine Show was going to be selling wine on-site less than legally. Although various other smaller and ‘less important’ wine events came forward claiming they have been doing this for some time already. [See the lengthy debates and arguments on this website about these matters]

My friends in the industry also ‘suggest’ that the Winex crew took legal action of some sort against the Jo'burg Wine Show – either to prevent them selling at all, or to test the legality of the venture? If no such legal steps were taken, I must apologise!

But my issue here is more the fact that Winex now proclaims (in capitals) that they are in fact the first to sell wine at such a event ever. This must surely be a fabrication of the biggest nature. Apart from anyone else, the Stellenbosch wine show 2004, in the front foyer of Vineyard Connection, did exactly the same thing.

What is worse is the support our unbiased (‘we have journalistic freedom’) media gives to these claims. Wine magazine is a sponsor of Winex are they not, so it will surely be in their best interest to support all claims made by Winex? Whether it be true or not. But we have all realised by now that Mr Fridjhon is pretty much in control of Wine magazine as is.

Regardless of those little misprinted statements and, as one of our ministers calls them, linguistic confusions, let’s get on to more important things.

Now, Winex is selling at the show through Johannesburg retailer Norman Goodfellow. I can’t fault that operation – very slick and well informed. What I want clarity on is the following (that, again, some friends have been muttering about): that the Winex organisers are telling producers at what price the wines must be supplied. Bizarre you might say, I thought so as well, and it might be yet another linguistic confusion. But, ‘trade prices minus what’? I would love to get clarity on this.  If it is the case that producers must now ‘adjust’ or decrease their trade prices to be able to partake in this little exercise, an explanation on the rationale behind it would be great for all concerned. Basing it on cutting costs and not running at a loss just won’t stick as an explanation.

WineX is sponsored by Rand Merchant Bank, rather substantially; producers pay a decent amount of money to attend and supply all the wine, apart from travel and accomodation costs). The on-floor activities are overseen by the Rotary Club (do they get paid at all, or are they dependent on the few bottles producers leave behind?). All attendees pay R60-R80 to enter. Does anybody except the security get paid to work there? Mmm .... running the maths, it seems that this little exercise ends up with a rather substantial sum of cash, but I haven't seen any donations from Winex to the Pebbles Project of late!

And I wonder if Caroline Barton of Makro has sent out a group email to producers to reconsider Winex.... in their best interests, that is.

Inititial response

Wow, this is all quite a mouthful, and we shall ask Winex for comments on the specific questions asked here. But on one matter, my impression is that Winex are no longer (since one early press release) claiming to to be the ‘first’ to legally sell wine at a show like this. As far as I can see, their website makes no such claim, nor does the Wine magazine online notice about the show. Perhaps Cassuis has seen such claims elsewhere?
- Tim James

•  Winex Cape Town is being held from 30 August to 1 September at the Cape Town International Convention Centre. Bookings via Computicket.

Response from Michael Fridjhon

It would be difficult to imagine a less well informed or biased set of assumptions than those posted on your website by Cassuis. For the facts on SAWIT and my Business Day article I am happy to provide an affidavit that the entire text was made available to a SAWIT trustee all of whose comments and suggestions were then incorporated in the final text. As to whether or not SAWIT is indeed ending its involvement with Phetogo I can point you to a media release on the subject, entitled ‘SAWIT withdraws from KWV empowerment transaction’. GM Charles Erasmus’s comments on the subject are also on record.

When it comes to Cassuis’s ponderings (which are not without malice) on the subject of Winex, I am happy to clarify some of the fishier musings.

1. I don’t want to speculate on whether shows which sold wine prior to the concessions granted this year did so legally. I am advised by our lawyers that all such sales must have been illegal.

2. We did not take any legal action against the Jo’burg Wine Show. It is entirely responsible for its own dismal performance. I look forward to Cassuis posting his/her apology.

3. Wine magazine has no connection whatsoever with Winex. With no evidence whatsoever to support that extraordinary allegation, it is clear that your correspondent is delusional - which pretty much disposes of his/her credibility anyway

4. Sales through Norman Goodfellows: Winex is not telling producers at what price they must supply the designated show retailer - this is between Norman Goodfellows and the wine producers. However, the whole shop@show arrangement has been designed to meet an industry-driven demand to create a retail environment at Winex. We have no doubt that the set-up this year will cost WineX money, rather than earn it any income. The investment in hardware, software, signage, print material and expertise comfortably exceeds R75000. The only revenue Winex can anticipate is space rental from Norman Goodfellows and, given the untested nature of this trading environment, we have agreed that this can only be calculated once the retail potential has been assessed.

5. Your correspondent's speculations about the costs of running Winex are about as off-the-wall as everything else in his/her note. Over and above space rental at the Convention Centre we pay for carpeting and partitions (over R100 000 in Cape Town alone) room draping, signage and banner hanging (this year over R2 000 000) and Rotary (a different amount for each show but around R200 000 for the year. In fact Benoni Aurora Rotary acknowledged a total fund raise through Winex Johannesburg of R190 000 last year - making Winex its most important revenue source). Without RMB’s assistance WineX would not be viable.

6. Over and above whatever else distinguishes Winex from other consumer wine shows there is the investment in infrastructure, service to exhibitors, marketing (over R1 million annually) and delivery of a more substantial audience than any other wine event in South Africa. Winex’s hardware is worth R500000 - and costs R100000 to transport, load and unload, exhibitors receive properly chilled wines (stored in 40-50 double door fridges which must be supplied to each venue) delivered to them from secure storage. They are not expected to do anything more than arrive at their stands timeously and spend four hours daily marketing to the (on average) 3000 visitors a day who attend the show.

For someone who pretends to be so well-informed, your correspondent’s ignorance is as staggering as the waspishness of his/her ponderings is petulantly small-minded. That said, I'm therefore not surprised he/she chooses to hide behind a nom de guerre.

But I'm wondering about that really interesting sentence slipped into Mr F's angry response, where he talks of the SAWIT trustee who seems to have first collaborated in Mr F's 'exposure' and then to have joined the other trustees in denouncing him. Who could this be? I look at the list of trustees on the Sawit website, and wonder who is playing a double game here, and when will he or she get zapped by one side side or the other. If what Mr F says is true, one of the following should be feeling a bit queasy: Kader Asmal, Charles Erasmus, Clarence Johnson, Johan Krige, Ntombifuthi Mtoba, Sharon Marco-Thyse, Cynthia Thandi Ndlovu, Theodore Page, Gavin Pieterse (bloody hell, is he still a trustee?), Michael Ratcliffe, Fatima Shabodien, Barry Stemmet, Willie Williams. How about a lie detector test like KWV did when they were trying to find out who'd been slicing green peppers into the sauvignon blanc?

From Cassuis to Michael Fridjhon:
Everything in life is not always meant to be malicious! Opinion is opinion, it's not stated as fact, just observations. As for the comment about possible legal action against JWS, if you recap what I wrote you will notice I apologised if I was misinformed. As for all my other musings, that's what they are. I must thank you for your response, because you did exactly what I was hoping for, respond to rumours and innuendo. Not entirely sure why the Sawit topic came up from your side; I clearly stated I have no interest in whatever is going on there. Again, thanks for explaining the true running of Winex, you just helped yourself out quite a bit.