Alcohol ban extension leaves liquor industry fuming
Durban - The liquor industry have requested an urgent meeting with the Presidency and various ministries following a further extension of the alcohol ban.
The extension of the blanket ban on the sale of alcohol and adjusted level 3 restrictions was announced by President Cyril Ramaphosa on Monday night.
The decision was not welcomed by the liquor industry as they have been unable to trade since December 28.
The Beer Association of South Africa (Basa) said that they would be submitting their proposals to encourage moderate, responsible consumption.
It said that they would also reiterate their proposal for off-site consumption trade to resume within the framework of the existing curfew, restrictions on gatherings and events.
Basa chief executive Patricia Pillay said the reality was that many small businesses in the craft-brewing sector would not survive the extended ban.
Pillay said that 30% of local breweries have been forced to permanently shut their doors and 165 000 people have already lost their jobs.
She said that an extended ban on alcohol would destroy many small businesses, while doing untold economic damage to the beer sector in general, and the 415 000 livelihoods it supports.
“Over 100 000 people have already slid into poverty because of the alcohol ban in the beer industry alone,” said Pillay, adding that they were aware of the immense pressure Covid-19 had placed on the health-care system.
She said they're also aware of the need for urgent interventions to curb the spread of the virus, however, this could not be at the expense of people’s livelihoods.
“Our members, especially small business owners and their employees, now have no way to put food on the table and care for their loved ones who may also fall ill.
The association said they were also concerned that the legitimate beer sector would never recover from this extended ban.
This, said the association, would provide a further boost to those who engaged in the illicit manufacture and trade of alcohol.
Pillay said the government lost R7.4 billion in taxes and excise duties in the previous two alcohol bans, which it could have used in the fight against Covid-19 and, specifically, for the procurement of vaccines.
She estimated that a further R2bn worth in lost tax revenue would result from the current ban.
South African Breweries (SAB) warned that the decision would continue to have dire consequences on the broader alcohol industry.
Zoleka Lisa, vice-president of corporate affairs at SAB, said they believed that measured alcohol restrictions were required as part of a balanced solution.
Lisa said a total ban destroyed hundreds of thousands of livelihoods, eroded fiscal income, promoted illicit trade, and was not aligned with international best practice.
SAB said it had taken a difficult decision to approach the courts, and said this was done in order to protect the more than one million lives and livelihoods that depend on it.
Lisa said although they were challenging the constitutionality of the ban, they were committed to an amicable solution.
Vinpro, which represents 2 500 South African wine industry stakeholders, said it estimated that in the 17 weeks following the prohibition in March 2020, the wine sector lost more than R8bn in direct sales revenue.
Vinpro chief executive Rico Basson said with less than a week before the 2021 harvest commences, the South African wine industry faced a grim picture of business closures.
“There is also going to be huge job losses, downward price pressure, structural damage to subsectors, and a decline in production without investment. There is also going to be quality deteriorating, a loss to the fiscus and diversification away from wine,” said Basson.
South African Liquor Brandowners Association chief executive, Kurt Moore said the government did not indicate when alcohol sales would be allowed again.
“It is prudent that the industry applies all possible cost-preservation measures to keep it afloat, and delaying excise tax payments is a significant factor.
“The industry and its entire value chain face an enormous financial crisis, and its capacity to make these payments is severely constrained,” said Moore.