President Cyril Ramaphosa’s decision to lift the restriction on alcohol sales, open beaches and relax the curfew has largely been welcomed by the business community – but some have warned that the previous restrictions might have come at a permanent cost.
“While these restrictions still limit the beer sector’s recovery, we are relieved to be able to begin trading again,” said the Beer Association of South Africa (BASA) which represents the Craft Brewers Association, Heineken South Africa and South African Breweries.
“While there is no guarantee that our craft brewers will recover, the president has offered small businesses a glimmer of hope – although it may be too little, too late for some,” the association said.
It said that the situation faced by small business owners and craft brewers remains dire and that the last two alcohol bans had a devastating impact on the beer industry. with an estimated 7,400 jobs lost, R14.2 billion lost in sales revenue, and more than R7.8 billion lost in taxes and excise duties.
Survey results from the Craft Brewer’s Association of South Africa indicate that 87.5% of craft brewers are still at risk of permanent closure. With zero targeted relief from the government, this will likely become a reality, the association said.
“BASA has written to the Presidency and to the Department of Trade, Industry and Competition (DTIC), to reiterate our call for urgent government intervention to save jobs and small businesses within our sector.
“To date, the industry has not been able to secure a meeting with Minister Patel or the Presidency to deal with this dire matter. BASA would like to reiterate that there is a desperate need for payment deferrals, financial relief, and liquor licence automatic renewals for 2021, if we are to have any hope of saving the businesses that remain standing.”
Financial support needed
These concerns were echoed by the Western Cape provincial government which welcomed the relaxed restrictions but warned that a number of businesses are still on the verge of closure.
“The fact is that there are many businesses that are severely distressed and many jobs that remain at risk as the Covid-19 pandemic continues to impact the markets that these businesses are dependent on, especially as the intensity of the second wave both at home and abroad has resulted in stricter international travel restrictions and route cancellations by airlines,” said the Western Cape’s minister for finance and economic opportunities David Maynier.
He said that it is critical that national government consider providing a support package for business, and that he has sent a letter to Employment and labour minister Thulas Nxesi requesting the extension of the UIF Covid-19 TERS scheme for the duration of the alert level 3 restrictions.
“We know that national government is running out of fiscal firepower, but this financial relief could be targeted to focus on the most seriously affected businesses, in the most seriously affected sectors like tourism and hospitality, so that we can save businesses and save jobs in the Western Cape. ”