Beer taps of South African Brewery brands, Castle, Castle Light and Black Label. Picture: Nardus Engelbrecht/AP/African News Agency (ANA)
Beer taps of South African Brewery brands, Castle, Castle Light and Black Label. Picture: Nardus Engelbrecht/AP/African News Agency (ANA)

SAB calls for sale of liquor during Level 4

By Sihle Mavuso Time of article published May 8, 2020

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Johannesburg - The government is facing a fresh headache from the country's biggest brewer, South African Breweries (SAB), which wants it to allow alcohol sales during Level 4 of the Covid-19 lockdown.

The brewer has over the past few days been publicly pleading with the National Command Council which takes decisions during the lockdown to consider its request under strict rules, arguing that “the longer we are unable to operate, the bigger the ripple effect”.

The brewer says the loss of R285 billion in revenue would be larger than the R229.7bn budget allocated for the health sector for 2020.

Hellen Ndlovu, SAB's director of regulatory and public policy, said they are in talks and they hope the talks will yield positive results.

“We have submitted our proposal to the National Command Council for alcohol to be sold under lockdown Level 4, with conditions. We are engaging them on the matter, and we do hope that we will reach common ground on the matter, sooner rather than later.

“We know from experience that any regulatory measures that interfere with the normal trade of the alcohol market will result in a growth in the illicit trade, so we were very apprehensive from the outset when a ban was announced.”

“Also, South Africa has a fully functional illicit alcohol market which is ready to capitalise on any ban implemented. Apart from the imminent negative impact on the market, a ban on sales would have a severe impact on our business as well,” Ndlovu said.

She defended their call by saying it was not only them feeling the pinch as a result of the ban. She counted, among others, farmers, wholesalers and retailers of their products as being among those suffering.

“Our entire supply chain has been affected by the alcohol ban. SAB’s value chain is wide-reaching and incorporates a total of 3 739 suppliers, of which 1 345 are SMMEs, supporting in excess of 140 000 jobs. In addition, our business sources agricultural inputs from more than 1 277 farmers, of which 757 are emerging farmers.

“The longer we are unable to operate, the bigger the ripple effect. Our products are purchased by a staggering 34 000 wholesalers and retailers, of which the vast majority are SMMEs. We estimate that these wholesalers and retailers support at least 250 000 jobs on their own, many of these being part-time, short term or temporary workers,” Ndlovu said.

Asked what their proposed solution would be should the ban be lifted and consumers overcrowd selling points, Ndlovu said one of the options was to allow online sales and limited trading hours, which included no sales on Sundays and holidays.

“The regulatory position taken towards alcohol in South Africa has definitely been on the extreme end of the spectrum when compared with lockdown measures put in place by other countries (both on the continent and globally). Countries like Mexico, Brazil e.g. are also under lockdown, however, off-premises sales of alcohol are permitted. And people have been adhering to the regulations without issues.”

The pressure on the government to allow alcohol sales comes as it is today expected to file responding papers to an urgent court application by Fair Trade Independent Tobacco Association (Fita), which wants the decision not to allow cigarette sales to be set aside.

Like SAB, Fita is in part arguing that the ban on cigarette sales is forcing them to surrender the sector to the black market, and it is financially crippling. While the spokesperson for the Co-operative Governance and Traditional Affairs Department, Lungi Mtshali, confirmed to Independent Media on Tuesday that they would oppose Fita’s application, the Presidency, which is cited as the first respondent, was mum when asked about the matter on Thursday.

Political Bureau

* For the latest on the Covid-19 outbreak visit IOL's #Coronavirus trend page

** If you think you have been exposed to the Covid-19 virus, please call the government's 24-hour hotline on 0800 029 999 or go to SA Coronavirus for more information.

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