As uncertainty on when the ban on alcohol will be lifted grows, the South African Breweries (SAB) says its value-chain has been crippled and this would inevitably result in a jobs bloodbath.
The brewery has been leading from the front in attempts to persuade the government to lift the ban on alcohol after it was re-imposed on 12 July.
But evidently, the government was not swayed, adamant that the consumption of alcohol led people to be reckless and negligent, placing them in dangerous positions of contracting the COVID-19 and overwhelming healthcare services with trauma-related incidents.
As political head tasked with the management of the COVID-19 pandemic through the Disaster Management Act, this assertion was reiterated by the Cooperative Governance and Traditional Affairs Minister Nkosazana Dlamini-Zuma on several occasions.
In announcing the reintroduction of the ban, President Cyril Ramaphosa said this was a measure to reduce the load on healthcare facilities as many people had to be admitted in hospitals after accidents as a result of drinking binges.
Despite this, the SAB, alongside other producers, have pressed on with their calls, urging government to rethink the decision to shut down the sector.
The knock-on effect of this, the brewery said, was that farmers were forced to retrench their employees. As a result, the future of more than 250 000 employees in its value-chain hangs in the balance.
Amid the uncertainty, the South African Alcohol Industry has also asked the government for a R5 billion in financial relief intended to offset the increasing debt being accumulated by liquor traders and producers.
The ban, the liquor industry argued, was done without any consultation, leaving them with high alcohol excise tax duties for July and August.
In a statement, Sibani Mngadi, spokesperson for the liquor industry said:
“In June, we did sell in or gave stock to retailers so they don’t pay immediately, they do so over time. They indicated to us that they can’t pay and keep stock as they are unable to sell it. So they can’t carry the inventory that you are unable to use but you still have tax liabilities and have to honour the input costs into those products things like payment of glass procurement, cans and various inputs into the liquid.”
Like SAB, the National Liquor Traders Council (NLTC) believed that the government’s ban on alcohol was unjustified and would lead to massive job losses.
The council, which represented 50 000 business owners, in statement said:
“+200 000 dependents and up to 1 million people that are part of the liquor industry value chain will be at economic risk should the ban on alcohol be introduced.”
Since the ban was introduced, the council said more than 10 000 taverns had already shut down permanently. “The impact of another hard lockdown will only grow these numbers further and deal a deadly blow to the only township economy still in the hands of black South Africans.”
Meanwhile, a tweet by the government on Wednesday 22 July sparked further confusion regarding the alcohol ban debacle. Initially, the tweet said alcohol and tobacco would be banned until the end of the lockdown. However, the government backtracked, saying the tweet was a mistake.