The Beer Association of South Africa (BASA) has called on Finance minister Tito Mboweni to offer the alcohol industry some tax relief ahead of his budget speech on Wednesday.
BASA said that the government needs to take this step after businesses in the sector were devastated by 19 weeks of restricted trading.
“To help rebuild the local beer industry, we are calling on Minister Mboweni to make a commitment not to increase excise taxes for the forthcoming financial year.
“At the very least, we call on him to commit to a below-inflation increase in excise taxes on beer. We need to save jobs and livelihoods, but we cannot do so without any targeted relief from government.
“We think that government’s unexpected R100 billion revenue windfall is an opportunity to offer some tax relief to businesses that were shut down by government for long periods.”
BASA said that the three blanket bans on alcohol have resulted in beer sales declining by 195 million litres since March last year.
“We have seen small businesses and craft breweries take the greatest of hits, with a survey conducted by our member, the Craft Brewer’s Association, indicating that 87.5% of craft breweries were at risk of shutting down following the third blanket ban on alcohol sales.
“The majority of these businesses have no certainty of survival beyond the end of February.”
BASA said that the overall potential sales revenue lost from the alcohol industry amounts to R36.3 billion with a total annualised loss to GDP at R51.9 billion – equivalent to 1% of the country’s GDP.
“More worrying still, are the 200,200 jobs which remain at risk within the alcohol industry, which is staggering for survival under present conditions,” it said.
No response from government
BASA said it has requested urgent interventions from government to ensure the survival of the local beer industry.
“While we have written to the Department of Trade, Industry and Competition, the Department of Tourism and the Presidency, we have received no response to our pleas.
“Our small businesses and craft breweries have been left up the creek without a paddle – and the time to save jobs and businesses is quickly running out.”
BASA said that there is a desperate need for other payment deferrals, and financial relief, in terms of automatic liquor licence renewals if we are to have any hope of saving the businesses that remain standing.
“This business is one that is now sadly faced with closure as a result of lost revenues. It is a truly tragic reality to witness those who have fed others go hungry themselves.
“While BASA remains committed to working openly and transparently with government, we cannot continue to keep businesses alive as an industry association alone.
“National government needs to come to the table – and fast – if it does not want to increase South Africa’s already staggeringly high unemployment rate of 30.8%.”