2 Distell continues to build and strengthen its reputation as a responsible corporate citizen that is committed to financial as well as non-financial future prosperity.
5 The Distell Group is South Africa s and Africa s leading producer and marketer of wines, spirits, ciders and other ready-to-drink (RTD) beverages, sold across the world.
8 With a diverse portfolio of brands with rich provenance and authenticity, our products are priced across the pricing continuum to cater to a broad spectrum of consumers.
9 Our ultimate governing objective is to create value for all stakeholders, our shareholders in particular.
12 By understanding our legal environment, managing our risks and engaging with our various stakeholders, we have identified seven key issues that shape the corporate responsibility pillar of our value-based management approach.
15 As a major producer of alcoholic beverages, and as a key player in the country s alcoholic beverages industry, Distell stimulates the South African economy through job creation and tax contributions. However, the associated risk of alcohol abuse and its impact on the health and well-being of individuals, families and communities necessitates that we do our utmost to encourage a culture of responsible drinking. Key focus areas Reducing underage drinking Preventing fetal alcohol spectrum disorder Controlling the sale and marketing of acoholic beverages Reducing drinking and driving Key stakeholders Government Industry associations and NPOs Our communities 2016 highlights We continue to engage with government on issues of transformation and legislation We continue to support projects and initiatives that aim to address alcohol abuse and promote safety, health and wellness
19 Excise duties are imposed on products such as alcoholic beverages to compensate for possible externalities attributable to such products. While appropriate excise taxes are intended to reduce the social, economic and health concerns of alcohol abuse, upward adjustments have a direct impact on Distell s pricing of alcoholic beverages, as well as on consumer affordability. Rising excise duties further exacerbate the trend of illicit trade in alcoholic beverages, including counterfeit products, which remains a key business challenge. High excise duty Illicit trade Key focus areas Key stakeholders Government (National Treasury) NGOs and industry associations 2016 highlights Resolution of ongoing litigation with the South African Revenue Service (SARS) Collaboration with industry associations and ongoing engagement with government on excise duty resulted in tax concessions on brandy and sparkling wine. This yielded a limited tax benefit for the industry
21 Strong and healthy communities offer a measure of protection from and prevention of abusive practices, including alcohol abuse. We therefore strive to further socio-economic development and make meaningful contributions to the communities in which we operate by supporting community welfare through our corporate social investment initiatives. Education, life- and technical skills, job creation, entrepreneurship and environmental awareness are the outcomes we pursue in implementing our holistic development strategy. Key focus areas Our investment strategy Alcohol-abuse-related harm reduction Youth and entrepreneurship development Arts and Culture Key stakeholders Our communities NGOs and NPOs, including education, arts and culture, and research institutions Government Our employees Industry bodies (including ARA) 2016 highlights The Distell Foundation has redirected its socio-econmoic investment strategy to be better aligned with the 2014 National Liquor Policy and Distell's transformation goals The Distell Development Trust has begun operating. Its initial focus is on enterprise development and innovation in community interventions This year we spent R17,28 million (2015: R16,67 million) on our CSI initiatives
22 FASfacts is a NPO that focuses particularly on high-risk, rural communities, and provides support and counselling to mothers through initiatives such as the Pregnant Women Mentoring Programme (PWMP). FARR is one the leading organisations driving research on FASD and implements nationally acclaimed research, prevention, support and management projects across South Africa.
25 Talent is a critical driver of business performance, and our ability to attract, develop, deploy and retain talent will be a major competitive advantage far into the future. This means fostering a positive and safe working environment with opportunities for career development, as well as building a diverse and sustainable talent pipeline, which is reflective of global, regional and local business realities. Key focus areas Employee engagement Learning and development Talent management and succession planning Employee relations and fair employment practices Employee safety, health and wellness Key stakeholders Employees Learning and development service providers Wellness service providers Recruitment agencies Employee and union representatives 2016 highlights Our first comprehensive employee engagment survey The implementation of the Accelerated Development Programme The launch of our talent management system, SuccessFactors Distell employees New appointments and turnovers
27 We are committed to growing Distell s future leaders and we invest in training programmes, including internships, learnerships, skills programmes, apprenticeships and adult basic education. This year we spent R26,4 million (2015: R24,5 million) on training initiatives Interns by functional area Interns by race
29 We identify, assess and develop talent for mission-critical roles through our established talent management processes to ensure continuity and effective organisational performance. In an ever-changing business environment, we discovered that it is critical to have a robust talent management strategy that is supported by easy-to-use technology. Distell is therefore embracing web-based, innovative solutions to manage our workforce in the most effective and efficient way possible.
30 Distell is committed to sound employee relations and fair employment practices in line with relevant labour legislation, our Code of Conduct, conditions of employment, collective bargaining agreements and our corrective action code. Employees who enjoy a positive working environment are more productive and more likely to pursue their careers with Distell. We therefore work hard to create an atmosphere conducive to innovative thinking and retaining valued skills.
31 The physical and psychological health of our employees has a direct impact on their productivity. It is therefore Distell s responsibility to provide a working environment that is safe and without risk to our employees health.
32 Social EAP
33 Medical WAKE
34 Breakdown of reported matters 2016 Breakdown of ethics line calls 2016
35 Our transformation journey is a key strategic imperative in being a responsible corporate citizen. It informs how we do business and aligns us with South Africa s national transformation goals. Our commitment to embracing diversity while striving to create a representative business is crucial in maintaining our reputation as a responsible corporate citizen that is dedicated to socio-economic growth within the key markets in which we operate. Key focus areas Our integrated transformation strategy Our B-BBEE performance Key stakeholders Suppliers Government The Distell Development Trust Strategic business partners 2016 highlights The focused business processes developed and channeled through Distell as part of our new strategy have given rise to meaningful work and solid progress in achieving our transformation goals Distell has made a conscious decision to demonstrate leadership in transformation as it is important for social and economic relevance and growth.
36 Our revised integrated transformation strategy aims to: Our transformation journey supports our business strategy, while aligning with government s national transformation goals.
38 The robust nature of the integrated transformation strategy and the implementation of integrated business processes have put us firmly on course to become a leader in transformation.
39 Distell must develop an integrated, efficient and agile supply chain that is reliable, responsive and meets our customers requirements in full. This will enable us to become a trusted and valued business partner with superior competitive advantage, thereby supporting our aspiration for African market leadership. Key focus areas Our supply chain strategy Supply Chain Excellence Manufacturing Preferential procurement Responsible agricultural practices Key stakeholders Suppliers Employees Government (Department of Labour; Department of Trade and Industry) Customers 2016 highlights The development and ongoing implementation of Supply Chain Excellence and our E 2 Empowering Excellence framework The launch of the E+Scalator programme to support local supplier development Part of this process was the development of Centres of Excellence, and, in particular, Supply Chain Excellence and Centres of Excellence Intrinsic.
41 Total litres of grapes, wine and wine-related products (330,8 million litres)
42 Procurement is an essential strategic function within our business that creates value in the form of savings while guarding our reputation through responsible and ethical purchasing. It is also critical in building successful and sustainable partnerships with our suppliers, while practicing due diligence.
44 2016 percentage of WIETAaccredited suppliers
46 The production of wines and alcoholic beverages relies heavily on the region s climate. Environmental resources such as the soil, climate, water and energy form the basis of our products. As such, Distell is wholly dependent on the long-term health of the environment, from farm to consumer. Key focus areas Compliance with changing legislation Managing our environmental responsibility Climate change and our carbon footprint Water usage and sustainable water supplies Waste management Conservation of biodiversity Key stakeholders Municipalities Suppliers Government (Departments of Environmental Affairs and Water and Sanitation, as well as Agriculture, Forestry and Fisheries) Consumers Local communities Non-governmental organisations 2016 highlights While the expansion of our production facility at Springs impacted our resource usage and contributed signifcantly to us not being able to meet our 2016 resource usage targets, we are confident of the benefits moving forward A new, dedicated returnable crate for the 660ml Hunter's range was launched and will increase our ratio of return on this bottle We acted collaboratively to effectively manage complaints at a waste water disposal area in Worcester
49 Put the necessary ISO systems and structures in place on site Train site personnel on the ISO standard Successfully operate a site with all systems in place for at least one year Conduct a full internal audit and an external legal audit
50 Our carbon footprint GHG emissions (kgco 2 e/l) This year, we submitted our sixth annual carbon footprint report to the Carbon Disclosure Project (CDP). As with the previous years, Carbon Calculated 6 externally verified our data against the ISO :2006 standard and provided us with limited assurance on the 2015 disclosure figures. Our report was assessed by CDP and was awarded a 99B disclosure and performance score based on their evaluation of the completeness of our submission and of our performance against their best-practice criteria.
52 Fossil fuel-based energy usage (MJ/l)
53 Electricity usage (kwh/l) Tonnes of CO 2 e captured
54 Water usage at our production sites is measured and recorded on a continuous basis on our SSD system. This enables improved management and reporting of water usage Water usage (l/l)
55 Organic waste recovered and recycled (tonnes) Glass used in 2016 (total of tonnes) New glass bought 2016 (tonnes)
56 The graphs below illustrate the annual reduction in required glass, and associated reduction in the amount of CO2e released as a result of our lightweight projects. Cumulative reduction in required glass (tonnes) Cumulative reduction in CO 2 e released Number of glass bottles returned and reused (millions) Glass returned and reused (tonnes)
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