KBL sues: The bigger, broader battle facing gov’t

The country’s largest brewer, Kgalagadi Breweries Limited, is awaiting dates for its court battle with government over the alcohol ban. Staff Writers, MBONGENI MGUNI & MPHO MOKWAPE note that other industries and legal experts are keenly following the case, as it will shape the government’s future actions around the pandemic

For Kgalagadi Breweries Limited (KBL), the case is clear. The government has unfairly and unilaterally instituted the fifth ban on alcohol, once again singling out the sector as the cause of an upsurge in COVID-19 cases. Also, televised statements made by Presidential Task Team members familiarly suggest the ban was a reaction to incidents of non-compliance in known hotspots in Gaborone.

“We acknowledge that there have been isolated incidents of gathering where there was consumption of alcohol by some, but the entire sector should not be disadvantaged for the irresponsible behaviour of a few individuals,” KBL spokesperson, Masegonyana Madisa said on Tuesday in announcing the brewer’s lawsuit.

“The company calls on the police and other authorities to step up their respective measures to ensure compliance and the rule of law in all incidents of abusive and unlawful consumption.”

KBL feels backed into a corner, having spent 103 days in 2020 and 56 days in 2021 without the sale of alcohol due to bans by government. Given the restrictions on alcohol sales over the weekend, KBL was only able to trade for 183 days out of the total of 286 days between March 21, 2020, and December 2020.

Producers, led by KBL, lost P880 million due to bans last year, with the brewer losing millions of pula more due to inventory that expired while being required to pay tax on the stock. The latest ban, instituted on June 28, has apparently pushed KBL too far.

“While we would have preferred a different approach, this action has become necessary as a result of the devastating cumulative effect the alcohol bans have had on KBL, the alcohol industry and its extensive value chain,” Madisa said.

Late on Tuesday, KBL’s papers were filed on an urgent basis before Gaborone High Court judge, Tshepo Motswagole with the brewer indicating that at least 50,000 direct jobs and 200,000 livelihoods in the alcohol value chain were threatened by the latest ban.

Although KBL has taken it upon itself to lead the charge, it is understood the Botswana Alcohol Industry Association, the Botswana Beverages Association and Business Botswana are generally supportive of the move.

In particular, Business Botswana, the country’s largest private sector lobby group, is believed to be keenly following the upcoming case as many of its members, who represent various sectors of the economy, have equally been affected by COVID-19 restrictions imposed by government.

At the centre of KBL’s suit against the government is the State of Emergency (SOE) regulations, under which the Health Services director can ask President Mokgweetsi Masisi to suspend alcohol sales and other interventions at any time.

The closure of borders between March and December last year, imposition of curfew times, restrictions of trading hours for alcohol when it has not been banned and other interventions, have all been done under the SOE regulations. Legal experts who spoke to Mmegi this week, on condition of anonymity, said the SOE regulations were not absolute and did not entirely insulate the government from lawsuits associated with the restrictions.

The lawyers requested anonymity as the case is pending before the court.

“Definitely the state can be sued during the SoE,” a prominent lawyer said.

“There is nowhere in the regulations that states otherwise.

“Remember the alcohol ban was introduced when the COVID-19 was still at its peak and it was meant to cushion the spread and the alcohol industry complied even though they were losing billions.

“But the persistent bans mean increased loss of revenue for the industry, which will result in massive job losses.

“KBL has a right to protect its business and if it means challenging the government at court, so be it.”

The lawyer added: “KBL is trying to protect its business and job losses. Remember some of the regulations contained in the SoE prohibit termination of employment but the government continuously bans alcohol, which provides thousands of jobs.”

Another legal expert said in terms of regulation 30E of the SoE regulations, there should be no termination of employment or retrenchment of employees by an employer who is unable to have employees work remotely from home or is unable to pay salaries.

“Now take KBL for example, its employees cannot work remotely at home and they are also not allowed to carry out production due to the ban. “That means a total mass loss of revenue for KBL and if they cannot generate revenue and they can’t retrench, what does it mean to its operations?

“KBL is a big entity with a big workforce and ceasing operations would not be an ideal choice,” the lawyer said.

It is expected that should Justice Motswagole accept the urgency of the case and move beyond the technicalities associated with the SOE, government could have a tough time defending the scientific arguments around alcohol and COVID-19. In March, Assistant Minister of Investment, Trade and Industry, Molebatsi Molebatsi found himself on the ropes in Parliament when legislators asked why alcohol kept being singled out for COVID-19 measures without the publication of scientific research into the matter.

Molebatsi said there had been limited time to research the links between alcohol and COVID-19, but added that observations had shown that consumers were congregating in large numbers without observing the protocols.

He further said the liquor trade ban that occurred from January 4 to February 28 had been because of the behaviour of patrons seen over the festive period, a comment critics said showed a level of vindictiveness ‘after the fact’ in terms of COVID-19 interventions.

“It was clear that people were all over meeting in large numbers and there was no time to say let’s do research, which can take six months,” Molebatsi told Members of Parliament. “We acted on what we saw. We had to take that decision to save people’s lives and the economy.

“We took advice from the health officials and the police and they did say that people’s behaviour with alcohol becomes difficult, which you cannot compare to the behaviours at school.”