Alrode is the location of a large South African Breweries (SAB) brewery and the alcohol ban has, according to SAB, affected it.
In a statement issued by the MSL Group on behalf of SAB, SAB is very sensitive to the difficulties and plight it faces in the fight against Covid-19. SAB fully understands the seriousness of this third wave and agrees that lawful and reasonable measures are needed to curb the spread of the pandemic to save both lives and livelihoods.
It, however, has admonished the government’s decision to ban alcohol sales for the fourth time and expressed its concern that this will only serve to grow an illicit trade in the country.
Job security affected
The Alrode brewery and the community that it employs and serves will suffer due to the latest ban.
According to Hlumelo Matshanda, on behalf of SAB, job security of individuals across their value chain will be affected by the bans.
“We are concerned by the continuous bans and the impact on our business, value chain and the broader economy. We are concerned by the employment crisis in the country and that’s why we are calling on the government to balance lives and livelihoods in its Covid-19 response,” said Matshanda.
“We continue to review job retention interventions for our employees as we navigate the uncertainty.”
The brewery can reportedly only run at 50% capacity while its running costs remain the same.
“A business running at a loss will not have additional resources available to spend elsewhere. An extended ban will most definitely have a detrimental effect on the surrounding communities as well.”
Legal action
As an organisation, SAB has decided to take legal action to protect its business and its value chain. This follows on an initial challenge instituted earlier this year.
Alongside this, the South African Liquor Brandowners Association (SALBA) has requested extended payment terms on excise duties due to Sars. SALBA chairperson Sibani Mngadi said the government’s nationwide ban on the sale of alcohol has far-reaching repercussions for the economy.
“The industry estimates that it will lose retail sales revenue of R6.1-billion as a direct result of the current two-week ban (equivalent to 4.1% of projected sales values for 2021), and the potential direct loss in GDP is estimated to be R 3.8-b (equivalent to 0.1% of the national GDP at market prices for 2020).
“Government will lose an estimated R3.6-b in direct tax revenue (excluding excise tax) for the two weeks (equivalent to 0.3% of national tax revenue, excluding excise taxes, for 2020), and the potential direct excise tax income lost is estimated to be R1.5-b (equivalent to 2.7% of excise revenue in 2021),” said Mngadi.
Matshanda added, “SAB maintains its willingness to partner with the government and its peers in the industry who remain committed to supporting the fight against Covid-19.
“SAB implores the government to urgently strengthen the partnership with businesses to accelerate the rollout of Covid-19 vaccines to protect millions of lives and livelihoods.”