The South African alcohol industry, which employs more than one-million people across the value chain, has submitted various proposals, including safety protocols for the manufacturing, distribution and trading of alcohol, to the Department of Trade, Industry and Competition (DTIC).
South Africans will, from June 1, be allowed to buy alcohol again under the revised lockdown regulations.
Following recent engagements with government, industry associations, the South African Liquor Brand Owners Association (Salba), the Beer Association of South Africa (Basa) and VinPro, the protocols address transmission risks across the value chain and enable the safety of the workforce, suppliers, retailers, farmers and consumers.
In a statement issued last week, the alcohol industry reiterated its commitment to helping restart the country’s economy to save the livelihoods of people, while simultaneously taking appropriate measures to curb the spread of the pandemic.
The industry contributes 3% to the gross domestic product (GDP) of South Africa’s economy and makes an indirect tax contribution (through value-added tax, customs and excise revenue) of R51-billion.
Additionally, the alcohol industry called for taverns to be economically included, and has requested taverns and microbrewers be granted an off-consumption trading licence to enable them to trade legally. The industry has proposed the opening of more legal channels on sufficient days and allowing adequate time to make purchases to enable consumers to maintain physical distancing protocols.
A “click and collect” model has been developed for the 34 500 licensed taverns, which will ensure that physical distancing measures are adhered to, as people will not be queuing to buy alcohol.
In discussion with tavern associations, these have committed to ensuring adherence to health and safety regulations, as well as physical distancing at all times.
Part of the support for taverns will include the initial free supply of personal protective equipment (PPE) packages, including sanitisers, masks, gloves, as well as education and training material to meet strict safety protocols.
The alcohol industry loses about R12.9-billion a year to illicit trade, which converts to a loss of R6.4-billion to the National Treasury. This was before the lockdown, implemented at the end of March, during which the sale of alcohol was prohibited.
South African Revenue Service commissioner Edward Kieswetter has confirmed that alcohol is still being sold and that the illicit trade of alcohol is thriving, leading to an exponential increase in these numbers, losses to industry that are still to be quantified.
Further, the alcohol industry said the illegal manufacture of alcoholic concoctions posed serious health risks and increased the burden on hospitals.
Pineapple prices have increased by 200% owing to homebrewers making their own illegal beer, and there are also incidents of black market price extortion taking place, where products are being sold illegally at double to triple normal prices.
Research has found that, in poorer households, this means scarce income is being diverted to alcohol. For example, a bottle of Klipdrift 750 ml sold at R300; a bottle of Jameson’s 750 ml at R1 000; and a 330 ml can of beer for R70 – more than double the normal price.
Looting of licensed liquor outlets continues to be a risk with 476 liquor outlet robberies reported nationally during the lockdown. As such, the closing of taverns during the extended lockdown will cause permanent damage to these legitimate small businesses, while the unlicensed liquor trade is said to likely continue to operate outside the remit of the law.
“A legal alcohol industry is a more economically efficient force against illicit activities compared to investing and diverting valuable state resources in enforcement to fight illicit trade,” the alcohol industry said.
Additionally, the eight-week domestic lockdown as well as the five weeks without exports, has already resulted in the loss of 117 600 jobs.
In the craft beer industry alone, there is a further 64% that will not meet their payments by the end of June and 13% have given notice on their premises and announced their decision to staff of their shut down. About 540 wineries have indicated that they will be unable to meet 70% of their payroll obligations at the end of June.
As an industry “we have expressed our willingness to partner and open our distribution networks − including collaborating with the government − to offer the alcohol industry’s entire distribution network to supply PPE to even the most remote clinics and deliver vital goods, including educational material, to communities most in need”.