Thu, 13 Aug 2020

In an emailed response to questions, Ab InBev-owned South African Breweries said it shares the government's concern about the about the increase of Covid-19 cases and the need to safeguard people.

However, Zoleka Lisa, vice president for corporate Affairs at SAB, said it doesn't believe the ban is the right move.

"We do not believe that the suspension of alcohol and beer sales will contribute to such an end. Learnings from the previous ban show that prohibiting the legal sale of alcohol and beer led to the exponential growth of illicit alcohol trade with dire public health consequences."

She added that the ban will threaten jobs across the beer industry's value chain and will deprive the government of revenue.

The National Liquor Traders Council, was also unimpressed with the government's sudden decision.

The council represents more than 35 000 traders, also known as tavern owners in townships across South Africa's nine provinces.

"Our view is that this is an unfair position taken by government and flies in the face of collaborative engagement that government always advocates. The ban caught us by surprise and will surely leave economic ruin in its wake. We are yet to fully understand what government is trying to achieve with this," said the council's convener, Lucky Ntimane.

Taverns generate between R40 billion and R50 billion in annual sales and contribute 34% in total liquor sales annually.

Plunging income

Ntimane said tavern owners will not have an income in the foreseeable future due to the ban.

The tavern owners also have limited financial support from government finance services, said Ntimane.

Distell spokesperson Frank Ford said the company had anticipated that demand would normalise after the ban was lifted but would not reach June 2019 levels. The company which produces wine, spirits and ciders, also expect that there will be a surplus of 240 million litres of wine in the industry.

"This surplus was as a result of the original ban. The new ban will likely exacerbate the situation," Ford said.

AB InBev, which owns SAB, had not responded to requests for comment when the story was published.

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