The South African Liquor Brandowners Association (SALBA) says it is concerned that the country remains one of the very few in the world that continues to prohibit all sale of alcoholic beverages during national lockdowns to combat the current global outbreak of the coronavirus.
This comes as more developing economies abandon the initial prohibition approach.
On 04 April 2020, India which is SA’s partner in BRICS lifted its six weeks prohibition on the sale of alcohol which was meant to prevent gatherings, allowing alcohol sales in bottle stores for off-site consumption.
A day before, Thailand also took the same approach.
Both countries have allowed e-commerce and home deliveries of alcoholic beverages as a means to limit non-essential movement of people.
On-consumption, bars and restaurants remain closed to maintain social distancing, which is a critical element of prevention of the spread of the coronavirus.
SA lagging behind
South Africa remains with Panama and Sri Lanka as few countries in the world where all form of alcohol sales is nationally prohibited.
It initially banned even the exports of its globally recognised wine and other alcoholic beverages to the world markets that had no prohibition in the sale of alcohol.
Exports have since been allowed at Level 4 of the lockdown.
Other big African economies like Nigeria and Kenya did not adopt a total ban of alcohol since the launch of their national response to the epidemic:
- Nigeria opted for closing on-Consumption while keeping off trade open- the sale of regulated (and taxed) alcohol is essential.
- Kenya explicitly listed alcohol as an essential good and allowed for off trade consumption only for three weeks.
- Last week, Kenya announced an easing of on-consumption sales of alcohol to include sales 30 minutes before a meal, during the meal and 30 minutes after a meal at restaurants.
- Bars and nightclubs remain closed
Prolonged alcohol bans negatively affecting the economy
SALBA says the local liquor industry is concerned that South Africa’s approach is inconsistent with the global approach, while the country suffers severe revenue losses and a potentially long-term negative impact on the economy as a result of the lockdown.
South African Revenue Services Commissioner Edward Kieswetter reported to Parliament that the ban on the sale of alcohol and tobacco has thus far cost the country more than R1.7-billion in lost tax revenue.
Alcohol contributes a significant amount of that one month revenue with beer at R664-million, spirits at over R400-million and wine at R300-million.
Kieswetter further raised concern about the illicit trade in alcohol and tobacco during the lockdown, stating:
“It is our perspective from the anecdotal evidence that cigarettes are still for sale. Alcohol is still for sale. We are raising this because illicit trade and criminal economic activities are a scourge which undermines not only our revenue collection, but which distorts our local economy, and robs South Africans of honest, hard employment opportunities.
“We cannot allow criminals to continue to thrive in our economy and sadly, when we have the misfortune of COVID-19, criminals use this as an opportunity to practice their trade,” said Kieswetter.
SALBA has urged government to reconsider its prohibitionist approach and to align with international best practice in permitting limited and closely supervised sales of alcohol through retail channels.
It says permitting retail sales and delivery of alcohol under strict conditions would not only limit losses to the fiscus, but will provide a vital lifeline for jobs across the entire value chain, from agriculture, packaging and retail sectors.
Southern African Alcohol Policy Alliance Director, Maurice Smithers says he welcomes government’s effort in prohibiting the sale of alcohol as a means to combat the spread of the coronavirus: