There is no question of its flair for producing a world-class chenin blanc, cabernet sauvignon or pinotage at an affordable price. But the provenance of South Africa's wines is altogether less savoury, an investigation by human rights monitors has revealed.

Workers on the country's wine and fruit farms lead "dismal, dangerous lives," according to Human Rights Watch (HRW), which found on-site housing unfit for habitation, exposure to pesticides without proper safety equipment, lack of access to toilets or drinking water while working and barriers to union representation.

Farm workers contribute millions to South Africa's economy, with products that are sold in Tesco and other British supermarkets, yet they are among the lowest wage earners in the country, the group's report says.

Daniel Bekele, HRW's Africa director, said: "The wealth and wellbeing these workers produce should not be rooted in human misery. The government and the industries and farmers themselves need to do a lot more to protect people who live and work on farms."

South Africa is the world's seventh-biggest wine producer, filling the equivalent of more than 1.2bn bottles a year. The industry, concentrated in Western Cape province, contributes 26.2bn rand (£2.2bn) to the regional economy, according to a 2009 study. Tourists from around the world enjoy tastings, cellar tours and weddings at vineyards amid glorious scenery between well-heeled towns such as Franschhoek and Stellenbosch.

South Africa has laws guaranteeing wages, benefits and safe working and housing for workers and other farm dwellers. But the government has largely failed to monitor conditions and enforce the law, HRW says.

Its 96-page report, Ripe with Abuse: Human Rights Conditions in South Africa's Fruit and Wine Industries, alleges: "Despite their critical role in the success of the country's valuable fruit, wine, and tourism industries, farm workers benefit very little, in large part because they are subject to exploitative conditions and human rights abuses without sufficient protection of their rights."

Housing for some workers is claimed to be uninhabitable. One farm worker showed researchers a former pig stall, without electricity, water or protection from the elements, where he has lived with his wife and children for 10 years. His wife said: "It makes me very unhappy because I can't guarantee safety of [my] children and can't provide for [them]."

Many workers live on farms with family members as part of their employment arrangement. Their land tenure rights are protected under legislation enacted in 1997. Yet, by civil society estimates, more than 930,000 people were evicted from South African farms between 1994 and 2004.

Interviewees described a steady pace of evictions, particularly when labourers were no longer able to work. Evicted workers who spoke to HRW said they had not been given suitable alternative housing or adequate compensation to find new housing.

Farmers sometimes resort to illegal tactics to force out farm dwellers, including cutting electricity or water. In one case, farm managers cut electricity for more than a year for a family with two children. Security guards on the farm harassed families in the middle of the night with dogs.

HRW also alleges that occupationalhealth and safety conditions on many farms endanger workers. The majority of the current and former farm workers interviewed said they had been exposed to pesticides without adequate safety equipment. In addition, many employers jeopardise workers' health by not providing them with legally required access to drinking water, hand-washing facilities or toilets.

Bekele said: "Given what we know about the effects of pesticide use, it is unconscionable that some of these workers are not provided with appropriate safety equipment, even after they ask for it."

South Africa's wine farms have a painful history. For centuries, workers were paid partly in alcohol in the so-called "dop" system, with pernicious health and social consequences. HRW found these payments had generally disappeared, although it did document two farms that provide wine as partial compensation.

One worker was quoted in the report as saying: "During the week, I am given wine in the afternoon, at 12pm, and at 6pm in the evening. I also get this on Saturdays. On Sundays, we get wine in the morning, afternoon and evening. In the morning, we get it before 7am, at 12pm, and we have to do Sunday prayer and then get more wine at 6.30pm. If you don't want the wine, then it's your choice. Everybody is drinking except the children and the guy driving the school bus."

Farm workers are some of the most poorly organised in the country, It is estimated the percentage of workers represented by trade unions in the Western Cape agricultural sector is just 3%, compared with 30% among those with formal employment nationally. HRW found some farmers try to prevent workers from forming unions in spite of South Africa's constitution and international law.

Bekele said: "The answer is not to boycott South African products, because that could be disastrous for farm workers. But we are asking retailers to press their suppliers to ensure that there are decent conditions on the farms that produce the products they buy and sell to their customers."

The report is based on more than 260 interviews with farm workers, farm owners, civil society members, industry representatives, government officials, lawyers, union officials and academic experts. It did not trace the supply chain for the products and does not identify farms in order to reduce the risk of retaliation against workers.

Representatives of the South African wine industry challenged the report's findings. Su Birch, chief executive of Wines of South Africa, said: "Most of the farm workers interviewed were identified by unions and NGOs, who have a vested interest in presenting the worst of cases. The report plays down the significance of the wine industry's substantial direct financial and indirect contribution to improving working conditions through Wieta [the Wine Industry Ethical Trade Association] and fair trade and empowerment schemes.

"The report makes only the scantiest reference to the many farm owners who comply with all legislation and go way beyond it. For every poor house on a farm, I can show you loads of good ones and some exceptional ones. Wine farmers are currently providing housing for over 200,000 workers, which represents an investment of billions of rands. Our industry is working hard to correct the wrongs of the past, and we accept that there is much work to be done. Even one case of abuse is one too many. But 'ripe with abuse'? I don't think so."

Vineyards have been passed down through generations of white owners. Workers are still invariably black or mixed race, although there are a growing number of black-owned cooperatives and labels.

Sikhula Sonke, a women-led union of farm workers, says its members now earn the minimum wage of 1,375 rand (£115.82) a month, although campaigners believe a living wage should begin at 4,000 rand a month. For years, they have urged Tesco to use its multi-billion pound profits to help improve workers' pay and conditions.

Haidee-Laure Giles, international programmes officer at the anti-poverty group War on Want, said: "Britain ranks among the biggest importers of South African fruit and wine.

"But retailers are maximising their profits at the expense of workers facing daily violations of their labour rights and from very basic to appalling living conditions. The UK government must establish a watchdog to prevent supermarkets benefiting from abuses against overseas workers."