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Level 4 lockdown a blow to SA liquor, hospitality industries

Dozens of people on the Durban beachfront promenade yesterday. While beaches and parks will remain open under lockdown level 4, all gatherings have been banned. Picture: Doctor Ngcobo African News Agency (ANA)

Dozens of people on the Durban beachfront promenade yesterday. While beaches and parks will remain open under lockdown level 4, all gatherings have been banned. Picture: Doctor Ngcobo African News Agency (ANA)

Published Jun 28, 2021


DURBAN - AS SOUTH Africa officially enters level 4 of the risk-adjusted Covid-19 national lockdown today, both the liquor industry and hospitality sector are set to be severely impacted by new restrictions.

President Cyril Ramaphosa last night announced the move to lockdown level 4 amid rising numbers of Covid-19 cases. The country recorded 15036 new Covid19 cases and 122 deaths yesterday, the national Health Department said.

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Ramaphosa said these harsher restrictions would apply for two weeks until July 11. Only then would the government reassess whether the measures had worked.

Alcohol sales have been banned for on-site and off-site consumption while restaurants will only be allowed to serve take-aways. While beaches and public parks will remain open, no gatherings will be allowed.

The curfew has been adjusted to 9pm to 4am daily. There is a total ban on gatherings and only funerals will be permitted with a maximum of 50 people in attendance. Night vigils are also banned.

The school holidays have been brought forward and will start this week. Ramaphosa said schools and tertiary institutions would be closed by Friday.

Other measures include a restriction on travel to and from Gauteng for leisure purposes. Restrictions will also be placed on visits to old-age homes, the president said.

He said that these restrictions would allow economic activity to continue while limiting personal contact through gatherings.

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Ramaphosa said these restrictions followed scientific advice.

The president's address came as the country is gripped by a third wave of the pandemic with Gauteng being the hardest hit, recording over 60% of daily reported cases.

Hospitals, especially in Gauteng, have reported a shortage of ICU beds and critical care personnel as people continue to need treatment.

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Ramaphosa's address also followed warnings from the scientific community of the coronavirus variant called Delta, which was first identified in India last year.

Health experts said the Delta variant, first identified in the country in April, was more transmissible than all other variants noted as variants of concern by the World Health Organization.

The variant is spreading in Gauteng, KwaZulu-Natal, the Eastern Cape, the Free State and the Western Cape.

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It is feared it will soon become the most dominant strain circulating in the country – because of how transmissible it is and how fast it spreads across a population.

Ramaphosa expressed his concern about the variant and said it seemed it would lead to higher infection rates than from the previous variant. He said it remained unclear when the country would reach the peak of the third wave, this as the first two had lasted between 9 and 14 weeks.

He insisted that Covid-19 protocols, which included the wearing of masks, should continue even after vaccinations.

Speaking to The Mercury earlier yesterday, the Federated Hospitality Association of SA (Fedhasa) in KwaZulu-Natal said the move to a higher lockdown level would pose more distress for the sector.

Brett Tungay, regional chairperson of Fedhasa, said that even at level 3, businesses had been suffering and many had closed shop.

Tungay said that those who were still surviving had taken on a lot of debt to be able to cover operating costs from 2020’s shutdown.

“I do not believe that many of the businesses in the province have the capacity to withstand a move to level 4 or 5.

“I also don’t think that the government has the financial backing to assist the workers with the Unemployment Insurance Fund Temporary Employer/ Employee Relief Scheme,” he said.

Earlier yesterday, the liquor industry wrote to the National Command Coronavirus Council, stating that they were worried about the long-term economic impact on the industry following the previous bans and given the rise in the illicit trade in alcohol.

The industry, comprising the SA Liquor Brand Owners Association, the Beer Association of SA, Vinpro, Liquor Traders Association of SA, National Liquor Traders and Consumer Goods Council of SA, said the previous lockdown levels 5 and 4 demonstrated that restricting the legal trade in alcohol fuelled the growth of the illicit market.

Speaking last night, the National Liquor Traders Council said the alcohol ban was taken without consultation with tavern owners, who would be deprived of an income without any financial safety net.

National Liquor Traders convenor Lucky Ntimane said the ban came as a huge blow to some of their struggling members.

“Once again, a decision has been made that will have dire consequences for our members without us being given an opportunity to propose alternative solutions,” said Ntimane.

Ntimane said they appreciated the severity of the situation and the urgent need to bring the third wave of Covid-19 under control. However, they did not believe that banning alcohol was the most effective approach.

Ntimane said tavern owners had made a huge effort to ensure maximum compliance with the Covid-19 safety protocols and to follow liquor licence conditions to the letter.

“All of this hard work will now be undone as illegal operators step in to profit from the ban,” he said.

“While we are bitterly disappointed by the announcement, we hope we can work with the government on a more sustainable approach that doesn’t punish legitimate businesses while rewarding unscrupulous criminal syndicates.”

COVID-19 has dealt yet another major blow to South Africa’s growth prospects for 2021 as the third wave of infections continued to worsen amid a worryingly slow vaccine roll-out.

President Cyril Ramaphosa yesterday ramped up the country’s lockdown to Alert Level 4 for 14 days.

Ramaphosa imposed a two-week total ban on the sale of alcohol, both for home and on-site consumption, with all non-essential establishments having to close by 8pm.

Restaurants and other eateries will be permitted to sell food only for take-away or delivery.

Ramaphosa said that because of the burden of infections in Gauteng, travel in and out of the province for leisure purposes will be prohibited. Gauteng now accounts for more than 60 percent of new cases in the country.

Ramaphosa said because the new variant of Covid-19 was more contagious, the measures that had been adopted so far may no longer be sufficient to reduce the rate of transmission.

The country’s Covid-19 cases have been driven by Beta variant, and the Delta variant that was first identified in India, which is easily transmissible and more contagious.

All gatherings – including political, religious, cultural and social gatherings – have been prohibited, except for funerals and cremations, where attendance may not exceed 50 people.

The curfew was reduced by one hour from 9pm to 4am.

The Beer Association of SA (Basa) said the 14-day alcohol ban will be the death knell for businesses and jobs.

“We have repeatedly communicated to government how the previous three alcohol bans have devastated thousands of small businesses across the beer value chain, leaving business owners, their employees and families destitute,” it said. “Many more businesses will now find themselves on the brink of closure as a result of the latest 14-day ban and no financial relief being made available by government.”

The economy has been forecast to grow 4.2 percent this year from a deep contraction of 7 percent last year.

Old Mutual Investments chief economist Johann Els said the government was doing its utmost to prevent the economy from experiencing the damage it did last year.

Els said that, overall, the latest measures will have little impact on the economic growth forecast, as they were only for two weeks.

“It’s too soon to make any adjustment on our economic growth forecast. All of these measures do have an impact on the economy. There is some impact, but it’s difficult to measure at this point,” Els said.

“However, there is a lot of uncertainty, and it will hurt confidence. Lack of confidence will also affect the economy,” he said.