Beer Association pleads with Mboweni for tax relief to help rebuild industry
Johannesburg - The Beer Association of South Africa (Basa) has called on Finance Minister Tito Mboweni to offer the industry some tax relief before his Budget speech on Wednesday.
“We believe this is the least that the government can do to help our members, especially small craft brewers, whose businesses have been devastated by 19 weeks of restricted trading,” Basa said on Sunday.
To help rebuild the local beer industry, Basa urged Mboweni to make a commitment not to increase excise taxes for the forthcoming financial year.
“At the very least, we call on him to commit to a below-inflation increase in excise taxes on beer. We need to save jobs and livelihoods, but we cannot do so without any targeted relief from the government,” Basa said.
“We think that the government’s unexpected R100 billion revenue windfall is an opportunity to offer some tax relief to businesses shut down by the government for long periods.”
The three blanket bans on alcohol – due to Covid-19 regulations – had resulted in beer sales declining by 195 million litres since March last year.
“We have seen small businesses and craft breweries take the greatest hits, with a survey conducted by our member, the Craft Brewer’s Association, indicating that 87.5% of craft breweries were at risk of shutting down following the third blanket ban on alcohol sales. The majority of these businesses have no certainty of survival beyond the end of February,” Basa said.
The overall potential sales revenue lost from the alcohol industry amounted to R36.3 billion with a total annualised loss to GDP at R51.9bn, which was equivalent to 1% of GDP. More worrying still, were the 200 200 jobs which remained at risk within the alcohol industry, “which is staggering for survival under present conditions”.
Since the beginning of the pandemic, the beer industry had contributed to mitigating the economic effects of the lockdown on the poor and homeless. Over 4 million meals were served to hungry South Africans, using craft brewers’ funds, premises, staff and distribution networks.
“While Basa remains committed to working openly and transparently with the government, we cannot continue to keep businesses alive as an industry association alone.”
Basa comprises the Craft Brewers Association, Heineken South Africa and South African Breweries.