Stakeholders in the alcohol industry are lamenting the prohibition on alcohol sales that was announced by President Cyril Ramaphosa on July 12 and which came into effect immediately.
The South African government instated an initial ban on alcohol sales when the country went into Alert Level 5 lockdown towards the end of March. The ban remained in place when the country moved to Alert Level 4.
From June 1, alcohol sales were permitted between 09:00 and 17:00 on Mondays to Thursdays.
However, the President indicated in an address to the nation on July 12 that the consumption of alcohol had contributed to an increase in people needing medical attention at hospitals, at a time when hospital beds were urgently needed to treat patients suffering from Covid-19-related complications.
The alcohol industry stakeholders voicing concern about the new prohibition include the National Liquor Traders Council, the South African Liquor Brandowners Association, the Beer Association of South Africa, Vinpro, the Liquor Traders Association of South Africa and numerous alcoholic beverage manufacturers.
“Ramaphosa’s decision to reinstate the nationwide ban on the sales, dispensing and distribution of alcohol with immediate effect is deeply troubling,” the stakeholders noted in a joint statement issued on July 13.
They noted that the industry had engaged continuously with the government and especially the Department of Trade, Industry and Competition over the past month regarding the efforts put in place to ensure compliance with regulations (limited trading days and hours), as well as adherence to the safety protocols in formal retail and taverns.
However, the industry noted that, despite these engagements, the industry was given no warning about the ban, nor an opportunity to consult with the National Coronavirus Command Centre before a decision was made, and no consideration was given to the immediate logistical difficulties it poses for both suppliers, distributors and retailers alike.
The industry pointed out that it had complied with all the commitments agreed to with government ahead of the reopening of the supply chain on June 1 to enable a safe environment for the sale of alcohol.
The industry stated that there had been no instances where taverns had not complied with the regulations.
The industry noted that it shared the government's concerns about the increase in Covid-19 infections and will continue to support efforts to curb this unprecedented health emergency. "This includes prioritising lives and safeguarding livelihoods across the sector during this pandemic, while ensuring that we adhere to safety, responsible trading, and the sensible consumption of alcohol.
“We will continue to offer unanimous support in placing its assets at the availability of Government in fighting this pandemic,” stated the industry.
The industry also reiterated its commitment to partner with government to create a social compact that drives behavioural change regarding the use and consumption of alcohol. The industry had initiated contact with the government in this regard on July 6 and was awaiting a response.
The South African alcohol industry stated that it has a wide and deep value chain employing almost one-million people across the country. Accounting for this, the industry highlighted that government’s decision to prohibit alcohol sales would have serious economic consequences, placing “hundreds of thousands of livelihoods at risk”.
The hardest hit will be the significant number of smaller retailers and taverners.
Further, the industry stated that the immediate enforcement of the ban would have other unintended consequences including further job losses throughout the value chain.
During the initial Alert Level 5 lockdown, the alcohol industry lost R18-billion in revenue and R3.4-billion in excise tax − excise tax is lost from the growth in sale of illegal alcohol products for which taxes are not paid.
The industry also pointed out that, as was witnessed during the initial suspension of alcohol sales, further restricting legal trade would likely fuel the growth of the illicit market, “a fact that is widely acknowledged internationally”.
The industry called for increased law enforcement to crack down on the illicit market trade.