The South African Alcohol Industry has outlined the impact of the mounting debt being accumulated by liquor traders and producers as they appeal for a government relief to the tune of R5 billion following the recent ban on the sale and distribution of alcohol.
The liquor industry says the immediate ban on alcohol, without any consultation, left the industry with massive alcohol excise tax duties for July and August.
Spokesperson for the Liquor Industry Sibani Mngadi reiterated that a deferment of excise duties payments would also assist the industry.
Mngadi says, “In June, we did sell in or gave stock to retailers so they don’t pay immediately, they do so over time. They indicated to us that they can’t pay and keep stock as they are unable to sell it. So they can’t carry the inventory that you are unable to use but you still have tax liabilities and have to honour the input costs into those products things like payment of glass procurement, cans and various inputs into the liquid.”
The ban on the sale and distribution of alcohol was reintroduced by President Cyril Ramaphosa on July 12, 2020 as a measure to reduce the load on the healthcare system that is already under pressure with the rising number of coronavirus (COVID-19) infections.
Addressing South Africans Ramaphosa said he was aware of cases where people organised drinking parties, visited family and refused to wear masks – in direct violation of government directives.
“In some cases, some people go to funerals where more than 1 000 people are in attendance. This is how the virus is spread through carelessness and through recklessness. It is concerning that many are downplaying the seriousness of this virus despite all evidence to the contrary and what we have cautioned about on numerous occasions,” said Ramaphosa.
Distribution, sale of alcohol suspended with immediate effect in SA to curb COVID-19 spread:
In response to the ban the National Liquor Traders Council (NLTC) said the suspension of the sale of the alcohol under lockdown Level 3 was “not the answer.”
NLTC, which represents over 50 000 business owners, argued that the suspension of the sale of alcohol cannot be the answer.
In a statement it said, “+200 000 dependents and up to 1 million people that are part of the liquor industry value chain will be at economic risk should the ban on alcohol be introduced.
The council said 10 000 taverns had already closed permanently and another 12 500 taverns were barely getting by, which represent 25% of taverns that are in distress and cannot survive another week of non-trading.
It adds that “The impact of another hard lockdown will only grow these numbers further and deal a deadly blow to the only township economy still in the hands of black South Africans.”
Full statement below:
