South Africa should strive to more effectively balance protecting lives, while ensuring businesses can continue to operate to support people's livelihoods when setting policies and regulations, such as those aimed at limiting the spread of Covid-19 infections, says fast-moving consumer goods (FMCG) industry organisation Consumer Goods Council of South Africa (CGCSA) legal, regulatory and sustainability executive Neo Momodu.

"The crisis exposes our biggest challenge, which is jobs. Even at the best of times, our labour market is struggling and an estimated 1.6-million jobs have been lost since the beginning of Covid-19. The challenges threatening jobs continue in the FMCG sector, including in the tobacco and liquor industry.

"Liquor traders are still only permitted to trade for four days a week, while other sectors can trade for seven days. Such regulations make it particularly difficult for small, medium-sized and microenterprises (SMMEs) to survive and the jobs they provide are threatened."

More than 3 000 jobs have already been lost in the liquor retail sector, and aggregate sales losses of R8.5-billion have occurred. The illicit market is growing and is now costing the country about R6.4-billion in lost tax revenue, Momodu adds.

"Even though we understand the difficulty in balancing lives against livelihoods, we must get to the point of finding a lasting solution."

The FMCG sector contributes about 25% of national gross domestic product and employs about 2.5-million people, or about 16% of the national labour force.

The sector continues to make fixed capital investments despite the challenges it has experienced. The sector also consistently posts price inflation that is below general inflation, allowing lower-income households to stretch their purchasing power.

The sector is a major employer and creates jobs for those who do not have training or tertiary education, as well as serving as an entry point into the job market for new entrants.

The sector also facilitates and supports SMME development and localisation initiatives have led to more than 90% of products sold by major retailers being sourced locally, Momodu says.

JULY UNREST
The unrest experienced in KwaZulu-Natal and parts of Gauteng led to 800 retail businesses being destroyed, with more than 200 of them burned down. This led to immediate food and medical supply shortages.

"The sector rallied and came together to resolve these challenges and restored the provision of critical supplies to battered communities. The sector helped to distribute more than R40-million worth of food donated by FMCG companies and other companies in the sector.

"Food supplies were restored under trying circumstances. One of CGCSA's member companies flew medical supplies down to Durban from Johannesburg at its own cost to ensure people in intensive-care units received the critical supplies they needed," Momodu points out.

Some of the lessons provided by the pandemic and the unrest is that the industry must strive to minimise disruptions to supply chains. This is difficult when global supply chains have not yet normalised, especially for retailers that rely on imported products.

Additionally, the pandemic has underscored the need for continuous engagement with government and stakeholders to improve alignment between practices and initiatives, as well as to share research and best practices.

"The sector needs to push for regulations that ensure that, even in tough times, we create an environment in which businesses can continue to strive and thrive. The support showed by communities in protecting economic infrastructure has also reinforced the importance of working with and investing in communities.

"However, FMCG and retail companies that work with communities encounter issues with service delivery and socioeconomic challenges that need to be addressed, but cannot be addressed by the company alone," says Momodu.