Beer maker, South African Breweries (SAB) held its annual discussion on the State of the Beer Economy at the company’s Alrode brewery in Alberton. Rigorous interactions with key stakeholders around the beer industry dynamics were held.
The Alrode brewery is the largest brewery in South Africa and the second largest in the southern hemisphere.
The Bureau of Economic Research presented key findings on the consumer sensitivity to the beer industry, among other insights.
SAB CEO Richard Rivett-Carnac gave an update on the impact of the consumer sensitivities to the beer industry in South Africa.
“Big price increases that come as a surprise, impact the trajectory of the business,” he said.
Describing the state of the beer industry, Rivett-Carnac said: “It’s been tough. We’ve seen our consumers squeezed by high-interest rates, high inflation rates, high fuel costs and high unemployment. The impact it’s had on the total alcohol industry is that there is an approximate decline in volumes of 5%. This is a very material number for the alcohol industry.
“Every year, we have no clue as to what is likely to be in the Budget speech – whether excise tax is to be increased and by what percentage point. Operationally, it is a big problem because we need to stop all brewery plants and recalibrate all our systems – more of a setback.”
As part of a panel discussion, economists Dawie Roodt and Olebogeng Ramatlhodi concurred with Rivette-Carnac on the adverse impact on the process followed in excise adjustments – putting the alcohol industry under pressure.
“In running the business, you must take account of the costs, but everything now must come to a stop,” said Roodt.
“It would be easier for excise duties if you knew beforehand what the changes would be.” Ramatlhodi said regulatory certainty was “key in creating industry stability”.
Rivett-Carnac said it was important to keep the beer industry alive and well owing to its significant contribution to the economy.
He said one in every R79 of gross domestic product came from beer, and one in every 66 jobs came from the beer value chain, which amounted to 250 000 jobs in South Africa supported by the brewery industry.
He said the global average in the sector was one in 110 jobs.