Shock from alcohol industry on new ban: ‘We were given no warning’

South Africa’s alcohol industry bodies say they are deeply concerned with the government’s decision to halt sales, dispensing, and distribution of alcohol, which will likely lead to job losses.

President Cyril Ramaphosa on Sunday evening reinstated a ban on liquor sales with immediate effect, to prevent alcohol related trauma incidents clogging up the hospital system already maxed out from the Covid-19 pandemic.

The South African alcohol industry including the National Liquor Traders Council, South African Liquor Brandowners Association (SALBA), the Beer Association of South Africa (BASA), Vinpro, the Liquor Traders Association of South Africa (LTASA) and manufacturers said in a joint statement that it was given no warning by the government prior to the immediate ban.

The industry bodies said they have engaged continuously with the government and especially the Department of Trade, Industry, and Competition (DTIC) 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.

“Despite these engagements, the industry was given no warning about the ban, nor an opportunity to consult with the National Coronavirus Command Centre (NCCC) 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 has complied with all the commitments agreed with government ahead of the reopening of the supply chain on 1 June to enable a safe environment for the sale of alcohol. Indeed, there have been no instances where taverns have not complied with the regulations,” the statement read.

It said that president Cyril Ramaphosa’s decision to reinstate the nation-wide ban on the sales, dispensing, and distribution of alcohol with immediate effect “is deeply troubling”.

“The industry shares with the government its concerns regarding the increase in Covid-19 infections and will continue to support efforts to curb this unprecedented health emergency.”

The president said in a televised address that since the sale and distribution of alcohol was reintroduced in June, hospitals have seen a spike in alcohol related admissions in their trauma and emergency wards. He said that hospital in the country’s worst hit provinces face a shortage of beds, with some having had to turn away patients.

The industry said it has committed to  partner with government to create a social compact that drives behavioural change regarding the use and consumption of alcohol.

“The industry has initiated contact with the government in this regard on 6 July and we are awaiting a response,” it said.

Jobs on the line

The liquor industry has a wide and deep value chain employing almost one million people across the country.

“The government’s decision has serious economic consequences, placing hundreds of thousands of livelihoods at risk.

“The hardest hit will be the significant number of smaller retailers and taverners. The immediate enforcement of the ban will have other unintended consequences which includes further job losses throughout the value chain,” the statement read.

It said that during the 9 week 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 which don’t pay taxes.)

Illicit market

As witnessed during the initial suspension of alcohol sales, further restricting legal trade will fuel the growth of the illicit market, a fact that is widely acknowledged internationally.

“It also creates security concerns for liquor outlets. The illicit market is outside the regulatory reach of government and operates mostly uncontrolled. For this restriction to be viable, it must be accompanied by considerably increased law enforcement in this part of the market,” the statement read.

“The industry recognises the need to balance the risk to lives with maintaining livelihoods. In addition to the economic consequences that threaten livelihoods, the contribution by the industry to the fiscus will be severely compromised, at a time when tax revenue is coming under increased pressure,” it said.


Read: Triple blow for South Africa’s economy

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Shock from alcohol industry on new ban: ‘We were given no warning’