South Africa’s alcohol industry has warned that if the country’s restrictions are extended further, it will lead to the permanent loss of thousands of jobs and livelihoods.
In a survey released on Thursday (9 July) wine body Vinpro said that businesses already had to lay off a significant number of workers since the start of the lockdown in March 2020.
Many who have managed to keep staff on, are unable to pay their full salaries, which also has a negative effect on the livelihoods of the families who are dependent on the industry, it said.
“Should the ban continue for another six weeks after 11 July 2021, respondents in the survey indicated that they would only be able to fund 51% of their normal monthly payroll,” said Vinpro managing director Rico Basson.
He added that it was not viable to cut off an entire industry’s lifeline every time there is a spike in infections, in part due to citizens not being disciplined, as well as delays in the vaccine rollout.
“The liquor ban is not only about whether people are allowed to enjoy their favourite drink or not. It’s also about keeping businesses afloat that put food on the table for thousands of families.
“As long as the government continues denying these businesses’ their income, while not providing any financial relief, we will see many people not only suffering from Covid-19 but also from poverty.”
Basson said that this irrational cycle needs to stop. He said that government needs to either partially or fully open up the industry or start providing financial assistance to help workers feed their families.
“Substantial structural damage has been done to the extensive value chain ranging from the vineyard to wineries and the market, which will take years to mend.”
Alcohol ban and review
The government introduced a complete ban on the sale of alcohol as part of a move to an adjusted level 4 lockdown at the end of June.
Alongside other restrictions, the ban is in place until 11 July, at which point the level 4 lockdown will be reviewed and updated by the government.
Vinpro is seeking an urgent interdict to the lockdown restrictions, with its main case set to be heard in August.
A separate case is being brought by South Africa Breweries (SAB), with the group challenging the country’s latest alcohol ban on administrative law grounds.
During the 2020 national lockdown, the government imposed an unprecedented total trading ban on alcohol from the end of March to the beginning of June, with further restrictions in place for the rest of 2020.
The South African Liquor Brand Owners Association said that the sales bans cost the legal alcohol industry R36 billion in lost revenues and the Treasury, R29 billion in lost tax receipts.
They also estimate that 15% of the alcohol market has continued to operate illegally, without paying any taxes.
While the government is set to review its level 4 lockdown this week, analysts say that the current restrictions are likely to be extended.