The South African alcohol industry has reaffirmed its objections against the government's ban stating that the unintended consequences, namely the rise of illicit alcohol production. File picture: Oupa Mokoena/African News Agency
The South African alcohol industry has reaffirmed its objections against the government's ban stating that the unintended consequences, namely the rise of illicit alcohol production. File picture: Oupa Mokoena/African News Agency

Alcohol ban will fuel illicit trade, industry warns

By Shakirah Thebus Time of article published Jan 26, 2021

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Cape Town - The South African alcohol industry has reaffirmed its objections against the government’s prohibition on alcohol sales to curb the spread of Covid-19 stating that the unintended consequences, namely the rise of illicit alcohol production and trade, will outweigh the efficacy of the ban.

South African Liquor Brandowners Association (Salba) chairperson Sibani Mngadi said that the industry supported the government efforts to quell the spread of the virus.

However, the measures should be “applied rationally and not as a kneejerk reaction.

"The government also has a duty to recognise the devastating social and economic consequences resulting from shutting down of an entire sector of the economy,” he said.

“Apart from the resultant ‘pandemic of poverty’ the ban is creating, the increasing illicit trade in alcohol is a severe threat to the economy.

“There is an enormous loss of taxation including VAT and excise as well as the loss of jobs contributed by legal alcohol producers and merchants to the fiscus.”

According to Western Cape police spokesperson Andrè Traut, several alcohol-related arrests were made from January 18 to 24. A total of 74 people were arrested for the transport of alcohol except where alcohol was required for hand sanitisers/disinfectants/soap; 11 people for selling, dispensing or distributing alcohol; 10 people for consuming alcohol in public places and two for tasting or selling of liquor to the public by registered wineries, wine farms or establishments registered as micro manufacturers.

Salba chief executive Kurt Moore said: “Roughly 15% of market share is accounted for by illicit trade or organised crime. That’s a significant portion of market share in the hands of syndicates who have only been further entrenched by the Covid-19 lockdown period.”

Last week, Premier Alan Winde said “the Western Cape’s economy is bleeding”, and the province had not quite struck a balance between saving both lives and livelihoods.

According to Winde, the alcohol ban had cost the province roughly R1bn in the first two weeks of its implementation, and would probably cost the province R2bn at the end of this month.

Winde has written to Health Minister Zweli Mkhize requesting the easing of certain restrictions in the province, including that alcohol sales be permitted off-site from Monday to Thursday, and not over the weekend.

Cape Argus

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