SAB cancels another R2.5 billion investment in South Africa due to alcohol ban

 ·15 Jan 2021

SAB has cancelled a R2.5 billion capital investment in South Africa following government’s third ban on alcohol sales.

This brings the brewer’s cancelled capital expenditure in the country to R5 billion since the first alcohol bans were introduced in March 2020.

The cancelled investments relate to upgrades to operating facilities, product innovation, operating systems, as well as the installation of new equipment at selected plants.

This decision will impact on the profitability of and number of jobs created by the companies that would have worked with SAB to execute the capital investment plans, it said.

“While SAB supports all reasonable and responsible measures that curb the spread of the pandemic and save lives, including an earlier curfew to limit movement, reduced indoor and outdoor capacity at gatherings, heightened law enforcement, we strongly disagree with the introduction of yet another outright ban on the sale of alcohol, ” said SAB’s vice-president of finance Richard Rivett-Carnac.

He added that allowing off-premises trading with restricted trading days and hours, couple with an earlier curfew, would have been an effective way to support the healthcare system without a total ban on alcohol sales.

“We will continue to knock on all available doors and engage with the government to find a way forward that is focused on saving lives and livelihoods alike,” he said.

Legal challenge

The cancellation of investment comes after SAB  announced plans to challenge the constitutionality of South Africa’s latest alcohol ban in court.

“After much consideration, SAB has decided to approach the courts to challenge the constitutionality of the decision taken and process followed by the National Coronavirus Command Council (NCCC) to re-ban the sale of alcohol,” it said.

“This legal action is the last resort available to SAB in order to protect our employees, suppliers, customers, consumers and all the livelihoods we support.”

The group said that challenging the constitutionality of the ban, which removes the South African public’s right as adults to responsibly consume a beer safely in the privacy of their own homes, is an integral part of its court action.

“The damage to the South African economy and impact on the alcohol value chain arising from ban on the sale of alcohol is, in SAB’s view, disproportional and unlawful.”

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