White wine, black land rights and the good intentions that withered on the vine

When a white vineyard owner rewarded his black workforce by giving them 11 hectares of their own, he thought he was doing them a favour. Meera Selva reports on a failed experiment in land reform

The soft breeze and mellow sunlight of the Cape vineyards make it feel more like the south of France than South Africa. The climate is gentle, the hills undulate and the cafés serve plates of wafer-thin ham, washed down with glasses of perfectly chilled Pinot Grigio. There's only one sour note - the people quaffing are the same colour as the wine: white. More than a decade after the collapse of apartheid, the Cape's vineyards are proving stubbornly resistant to attempts to scrap a more subtle flavour of racial segregation.

The soft breeze and mellow sunlight of the Cape vineyards make it feel more like the south of France than South Africa. The climate is gentle, the hills undulate and the cafés serve plates of wafer-thin ham, washed down with glasses of perfectly chilled Pinot Grigio. There's only one sour note - the people quaffing are the same colour as the wine: white. More than a decade after the collapse of apartheid, the Cape's vineyards are proving stubbornly resistant to attempts to scrap a more subtle flavour of racial segregation.

When Alan Nelson, a white lawyer from Cape Town, first set eyes on a bankrupt estate that sprawled over 143 hectares of the Boland region of the Western Cape he knew he had found the place to realise his childhood dream of becoming a wine-maker.

Buying the estate and christening it Nelson's Creek in 1987 was the easy part. Getting his wine dreams off the vine and into the bottle would be harder and, to that end, the ambitious advocate struck an unorthodox bargain with the men and women who would be doing the work.

If they would help him create an award-winning wine, the wealthy anti-trust expert told his black workforce, he would return the favour by giving them some land of their own to start their own label. Nine years later, Nelson's Creek Chardonnay was acclaimed as the best wine in South Africa and he delivered on his promise.

He donated 11 hectares to 16 families working his estate to do with as they wished, though he said he hoped they would use it to grow vines. To get the ball rolling, the lawyer hired a retired black headmaster, Victor Titus, to help co-ordinate it all.

"The reaction from the surrounding farmers to Alan's move was extraordinary," Mr Titus said. "Everyone said it was a good idea in theory but they couldn't do it themselves because their farms were too small, or they couldn't afford to take the risk, or their workers would not know what to do with the land.

"In the end, people just avoided him in church. They were scared that their own workers would start demanding their own land rights."

Undeterred, the staff at Nelson's Creek pooled the housing subsidies they received from the South African government and set about experimenting with different grapes and different techniques on their six hectares of sunshine. In 1998, they launched New Beginnings - the world's first wine to be grown, produced, tasted and marketed entirely by black people.

The response was extraordinary. By the time they grew the first grapes later that year, newspapers, radio and television stations throughout America and Africa wanted to hear their story. One retailer offered to buy up all the wine they could produce.

"We had some Palomino grapes, but we had to source some Cape Riesling, Chardonnay and Cinsault grapes to make a decent range of wines to sell," said Mr Titus. "Looking back, all that publicity meant that we had to run before we had tried to walk."

New Beginnings had started well, turning enough of a profit to keep everyone happy. For the older workers, the first fruits of the venture were spent on previously unattainable luxuries such as a fridge, a sofa or television. One of the more enterprising farmers, Peter Jacobs, used his share to buy a second-hand car and eventually set himself up as a used-car salesman.

Several neighbouring vineyards set up similar reforms and created a flurry of copycat labels which suddenly appeared boasting names such as Freedom Road and Winds of Change.

New Beginnings had become a poster boy for the increasingly popular cause of land reform throughout South Africa and the stakes were climbing dangerously high.

The land reform issue was a "ticking time bomb", according to Gillingwe Mayende, the director general for land affairs.

He caused a stir when he told parliament last year that South Africa could become another Zimbabwe unless the country's white farmers cooperated with the government's land reform plans. By 2015, the government wants to redistribute 30 per cent of all land, some 24 million hectares, currently held by white farmers. In 2003, the South African Wine Industry Trust said it wanted black wine-makers to get a 10 per cent share of the country's vineyards within five years. Today, only 1 per cent is held by black people.

In that climate, everyone was desperate for the New Beginnings project to succeed.

"We had so much goodwill and excitement over our projects, it was a great time to be here," said Mr Titus. "It was inconceivable to believe we might fail."

But New Beginnings was already withering on the vine. The 11 hectares simply could not grow enough grapes to produce a commercially viable crop and the workers had no idea how to market and distribute the wine they did have effectively.

Each hectare of vineyard costs between 85,000 rand (£7,500) and 125,000 rand (£11,000) a year in poles, vines, and irrigation. The New Beginnings workers got government grants to help them start up the business,and Mr Nelson provided his equipment for free but, ultimately, the profits were tiny.

Once they were divided between the 16 families, they came to almost nothing. Some of the families found they simply did not have enough time to do their share of the work, so they had to spend the scant profits they did receive on hiring other workers.

"The basic problem was a lack of experience. The workers had to accept that they are not business people. Now, the land still belongs to them but they have realised wine-growing is not as easy as it seems," said Mr Titus.

Last year, they had to give up. They asked Mr Nelson to reincorporate their 11 hectares into the rest of the vineyard, in return for a share of the profits.

New Beginnings was still a powerful marketing tool and the label itself survived but the dream of a wholly owned and run black vineyard was dead in the ground. The story of Nelson's Creek showed that reform would be more complicated than just handing over a parcel of land to the people that needed it.

"The land reforms that people have tried in the Cape have lacked any sort of training or education," said Anzill Adams, the chief executive of the Louisvale vineyards in the Western Cape. Mr Adams, who became the first black chief executive of a South African vineyard 16 months ago, believes the New Beginnings experiment may have created more problems than it solved.

"The beneficiaries of that sort of scheme have no idea how to manage the land so they end up becoming more dependent on the owners," he said.

"It's important to look at the financial implications of any kind of reform; the workers need to have the knowledge to work the land, and the financial back-up to get the best returns from it. Otherwise, the land given to them will revert into small subsistence farms."

The South African wine industry generates about 16.5bn rand a year but, out of that, only 30 per cent is generated on the farm. The remaining 70 per cent of the money comes from the way the bottles of wine leave the farm and reach a customer's table.

The industry is fiercely competitive; in South Africa alone there are more than 3,000 wine-growing estates. Under the apartheid government, most wine makers were told what types of grapes to plant, and how much wine to make.

The bureaucracy left the Western Cape wine-growers half a century behind the rest of the world. Until the 1980s, many land-owners still operated the " dop" (slang for booze) system, when workers were paid in wine instead of cash.

Since apartheid ended in 1994, South Africa's vineyards have made up a great deal of lost ground, but there is still a lot to be done. The landowners are all white, as are most of the customers in the upmarket restaurants and wine-tasting rooms dotted around the countryside. The farm workers and waiters are still black.

Mr Adams has not implemented any kind of land reform at the Louisvale estate. Instead, he has sent his seven permanent employees on a 30-week agricultural training course and is looking at ways to set up some kind of educational programme within the vineyards. "Effective land reform can only be driven by people with skills," he said. "South Africans as a whole don't have the skills to compete in the global wine market - they don't know how to price wine correctly, or deliver the right quantities of wine at the right quality. If we train farm workers to do this, they are truly independent - they can manage their own estates, work for who they want to work for, earn their own good wages."