Product Labelling of Wine and Fruit to Promote Black Economic Empowerment in South Africa: a Case Study of the Thandi Empowerment Label

Black economic empowerment (BEE) aims to promote business opportunities curtailed by apartheid in South Africa. This study deals with empowerment labels and their potential for promoting BEE in South Africa. The Thandi label is a South African initiative to market fruit and wines originating from farms that meet various broad-based BEE criteria. Accredited farms include farms operated by previously disadvantaged farmers and farm-worker equity-share schemes (FWES). A case study of the Thandi label was undertaken to determine whether or not the accredited broad-based BEE attributes have added value to Thandi products for participating farm businesses. Primary data was collected via in-depth interviews with managers of Capespan, The Company of Wine People and empowerment farms participating in the Thandi label. Results indicate that the Thandi label has not been successful in differentiating fruit, whereas the Thandi wine label has increased sales revenue and is covering accreditation costs and the recurring costs of maintaining and marketing the label. The data indicates that empowerment attributes are useful in finding shelf space for products, but that quality is essential to grow market share and to earn price premiums. Accredited empowerment attributes can add value to quality products sold to discerning consumers. It is recommended that the South African government, for whom BEE is a policy objective, should absorb some of the costs confronting producers and marketing agencies in negotiating standards for farms and firms participating in generic empowerment labels. It could also offer auditing services to accreditation agencies to improve their credibility.