Alcohol sales ban is causing corporate carnage: Agri SA

Reading Time: 2 minutes

Agri SA says the ban on alcohol sales in South Africa is creating corporate carnage. Government announced the reintroduction of the ban on the sale of alcohol in July.

President Cyril Ramaphosa announces the ban on the sale of alcohol:

Agri SA is now concerned about the impact on the entire alcohol value chain which stretches from wine, barley, hops, fruit and maize farmers, to glass manufacturers and processors.

Agri SA’s head of Corporate Chamber, Mihlali Xhala, says the ban is not helping with economic recovery.

“If our main priority is economic recovery, this is definitely not helping. The industry is willing to abide to strict protocols, but the sudden ban does not make sense. Illicit alcohol trading is shooting through the roof and government is losing billions in tax and excise income. Agri SA would like to urge government to reconsider the ban on alcohol sales to allow the agricultural sector to continue contributing towards economic growth.”

SAB dumps investment plan due to alcohol sale ban

South African Breweries (SAB) announced on Monday it was cancelling R5 billion ($290-million) of planned investments as a result of revenue losses sustained during a near three-month ban on alcohol sales amid the COVID-19 pandemic crisis.

SAB, owned by the world’s largest brewer Anheuser-Busch InBev, said it had cancelled R2.5-billion planned expenditure for this financial year, while the other half for the next financial year remains under review.

The sector has already cut 118 000 jobs and projections show that a nine week ban now will cost another 84 000 jobs and R15.5-billion in GDP, said Richard Rushton CEO of Distell, which makes wines, spirits and ciders.

Investments being considered by SAB included upgrades to operating facilities and systems, as well as the installation of new equipment at selected plants, it added.

The company has since called on government to reconsider the ban. It says it does not believe the legal sale of alcohol and beer is the primary contributor to the rising rate of COVID-19 infections.

The alcohol industry says the ban on the sale of alcohol is a big mistake: