Alcohol industry at risk of collapse if South Africa’s lockdown restrictions are not lifted: companies

After a wave of violence and destruction in KwaZulu-Natal and Gauteng, which saw 161 liquor stores and distribution centers looted and damaged, the alcohol industry has called for the ban on sale to be lifted alcohol so that legal businesses can operate.

He said restrictions must be relaxed to avoid a possible industry-wide collapse – which threatens the livelihoods of a million people supported by the sector.

South Africa moved to an adjusted Level 4 lockdown in late June, with a complete ban on the sale of alcohol in place.

The alcohol industry has faced various forms of restrictions since South Africa introduced its first Covid-19 restrictions in March 2020, with the government arguing that alcohol consumption puts increased pressure on hospitals from the country.

Estimates show that the latest four-week ban put 9,206 jobs in the alcohol industry at risk, with a potential loss of R 10.2 billion in taxes and excise duties.

This follows the three previous bans which resulted in the loss of over 7,400 jobs in the beer industry alone, as well as R14.2 billion in beer sales revenue and over R7.8 billion in losses of taxes and excise duties.

The Beer Association of South Africa (BASA) as well as the Alcohol Traders Association of South Africa (LTASA) and the Vinpro wine group have now written to the Minister of Trade, Industry and Competition, Ebrahim Patel, calling for an urgent meeting to discuss the devastating impact of the ban, and alternative interventions.

“These companies and thousands of others simply will not survive a continued alcohol ban,” BASA said. “At the same time, we know that many South Africans continue to obtain alcohol from the illicit industry, which is already worth R20.5 billion.”

The massive looting of alcohol outlets and vending machines last week in KwaZulu-Natal and Gauteng has further increased the illegal sale of alcohol, making the current ban even more absurd, the association said.

“As a member of the cabinet directly responsible for trade and industry in the country, it is essential that Minister Patel takes into account the concerns of the industry to save a vital sector for our economy, in order to guarantee its capacity to continue to support over a million livelihoods during these difficult times.

No response from Minister Patel’s office has been received to date, the association said.

“The beer industry is publicly calling on Minister Patel to schedule this emergency meeting and step in to save an industry on the brink of collapse.”

Read: South Africa braces for reopening of schools – with key change

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