Billionaire Johann Rupert has never cracked the economics of agriculture. That admission, delivered to a packed hall of farmers in Cape Town last week, came from the chairman of a global luxury goods empire and the owner of one of South Africa’s best-known wine estates.
“I really honour the people in this room, because I don’t know how to make money from farming,” Rupert said in a keynote address at the 31st Commonwealth Agriculture Conference at Century City. Britain’s Princess Anne, president of the Royal Agricultural Society of the Commonwealth, also addressed the gathering.
The commercial credentials behind the confession are considerable. Rupert, 76, has chaired Compagnie Financière Richemont SA, the Geneva-based owner of Cartier, Van Cleef & Arpels and Montblanc, since 2002. He controls the group through Compagnie Financière Rupert, which holds about half of its voting rights. He also chairs Remgro Ltd., the investment group founded by his father, Anton Rupert, owns the Leopard Creek golf estate on the edge of the Kruger National Park, and ranks as South Africa’s richest person, according to Forbes.
Yet his own farming venture, the L’Ormarins estate in Franschhoek where his family makes wine and runs the Franschhoek Motor Museum, has left him skeptical about the sector’s returns. He described farming as a way of life rather than a business, and set out the pressures that leave producers with little control over their margins. Bad weather, wars, swings in commodity markets and disruptions such as a port strike can wipe out a good season before produce reaches buyers, he said.
Tax was his other central concern. Farmers have their capital tied up in land and buildings that cannot move, leaving them exposed to the taxman, he argued. By contrast, companies whose value sits in intellectual property can relocate far more easily. The structural comparison underscored his point that agricultural capital is unusually illiquid and unusually vulnerable.
The timing of his remarks gave them added market weight. The conference took place a day after U.S. President Donald Trump announced plans to end South Africa’s eligibility for duty-free access to the American market under the African Growth and Opportunity Act, a blow to the country’s fruit and wine exporters. For an industry already squeezed by weather and market volatility, the loss of preferential trade terms adds a further risk to an investment case Rupert himself finds hard to justify.
Meanwhile, Rupert devoted much of the speech to wider economic concerns. He spoke about widening income gaps, rising public debt and the burden being passed to future generations. Artificial intelligence, he said, is now disrupting skilled jobs, pointing to Microsoft Corp.’s reported offer of voluntary exits to about 60,000 employees as an example. What keeps him awake, he said, is that humanity’s progress moves in a straight line while its capacity to destroy people and the planet grows exponentially. The world does not necessarily have too many people, he said, but it has developed “some very bad habits.” He borrowed an image from British physicist Brian Cox to illustrate scarce resources: “Think of the Earth as an apple and the skin as the water.”
He said empathy and curiosity are the values he tried to teach his children and build into the culture of his business group, with responsibility to future generations guiding decisions.
Princess Anne picked up the theme in her own address. She said humanity had advanced because farmers had fed it, adding, “That is still true, and it will continue to be true.” She praised the Western Cape as “an excellent illustration of how agriculture, research, education, technology” work together, and joked that weather was one thing artificial intelligence could not solve. “Weather is the bit that nobody can guarantee,” she said.
The conference, hosted by Agri-Expo, ran from Nov. 1 to Nov. 5 under the theme “Opportunities of change in a connected world.” It was the first time Cape Town hosted the event, the flagship gathering of the society the late Prince Philip founded in 1957.
Separately, Rupert’s Richemont is in talks to join the Global Diamond Consortium, the group led by former De Beers Chief Executive Officer Gareth Penny that is bidding for Anglo American Plc’s 85% stake in the diamond producer. Botswana said on Nov. 9 that it backs the bid and will double its own holding in De Beers to 30%. For the luxury group, the diamond play marks a very different bet than the farming one its chairman confesses he cannot figure out.