The dawn of a new era for Orange River Cellars

Orange River Cellars, located in Upington in the Northern Cape, is in the process of converting from a co-operative to a company. CEO Charl du Plessis spoke to Glenneis Kriel about this development.

-  Glenneis Kriel

How and why was Orange River Cellars established?
Orange River Cellars (ORC) was launched in 1965 as a co-operative to create an outlet for wine grapes produced in the region once the Orange River Irrigation Scheme took effect in 1966.

ORC’s Upington Cellar was built in 1967 and had its first harvest the following year. At the time, it produced only three types of wine: a dry white, a semi-sweet and a sweet.

From the 1970s onwards, production increased substantially, leading to the establishment of wine cellars in Keimoes, Grootdrink, Groblershoop and Kakamas, as well as juice cellars in Kanoneiland and Grootdrink.

Its product range also expanded to include a wide variety of single-cultivar and blended still wines, brandies, fortified wines, and even gin.

How was the co-operative structured?
Each farmer had a quota to deliver a certain volume of wine each season, and the co-operative’s profits were shared between the farmers.

Producers who wanted to downscale their wine-grape production or stop altogether would sell their quotas to others looking to grow their production.

Why are you converting the co-operative into a company?
The co-operative system is a dated and rather clumsy business model because of the time it takes to get everybody’s approval to make decisions and evaluate their impact. It’s also difficult to build reserves for difficult times, as the profits are paid out to producers every year.

The main reason for the change, however, is that most of our suppliers have downscaled winegrape production over the past decade in favour of more lucrative crops, such as raisins, and nobody wants to take over their quotas, let alone buy them.

When was the decision taken to make this switch?