Fears of increase in illicit trade in liquor following fresh ban
Cape Town - Less than a week into a fresh ban on the sale of alcohol, the liquor industry said it's seeing signs of a rise in the illicit trade.
According to the industry the public has been complying with the regulations however law enforcement needed to be more rigorous in dealing with illegal alcohol sales.
Convenor of the Liquor Traders Formations, Lucky Ntimane said: “Alcohol is being sold at ridiculously high prices, it’s happening and these prices are going to go up every week that we are closed.
“We are well aware of the numbers and we are concerned but it was expected, for me and our members we are concerned about the livelihoods and some balance needs to be struck.”
Ntimane said the industry will struggle to recover from the latest ban.
“The black market is thriving and it must be allowed to trade on a 7-day period.
“The independent liquor traders are worried about the rent and they lose their licences.
“We urgently need the government to reconsider the current situation,” he said.
Fears are growing that the country could be placed on a higher lockdown restriction after the Covid-19 death toll surpassed the 30 000 mark.
Already it was confirmed that President Cyril Ramaphosa would be meeting with the National Coronavirus Command Council (NCCC) today (Wednesday) setting the stage for another announcement by Ramaphosa at the end of the week.
“According to the study by Euromonitor, the alcohol industry loses R12.9 billion in gross revenue per year to illicit trade, which converts to a loss of R6.4bn in alcohol tax contribution to the SA Revenue Service.
“The World Health Organisation estimates that 24% of the alcohol market in South Africa is illicit.
The legal alcohol sector contributes R72bn to the government’s fiscus by way of taxation, VAT and excise and in 2019, the alcohol sector contributed 3.4% (R173bn) of the nominal GDP.
Beer Association of SA chief executive Patricia Pillay said: “We are concerned that another ban will further entrench the web of illicit alcohol trade as consumers look for ways around the ban.
“Already, before Covid-19, the World Health Organisation had estimated that a quarter (24%) of all alcohol consumed in South Africa was sold illicitly.
“The rise in the illicit manufacture, trade and consumption of alcohol caused by prohibition poses serious health risks as health and safety standards are bypassed.
“Methanol poisoning can cause blindness, liver damage and even death.
“An increase in illicit trade also means that the taxes and duties that usually accrue from the legitimate sale of alcohol are lost to the fiscus.”