Headaches as alcohol becomes off limts
MBOMBELA - The government’s reinstatement of its ban on alcohol sales and transportation on Sunday evening is deemed disastrous for the industry as job losses loom.
While it was expected by many that this day would come, Lowvelders call the sudden ban “harsh” and were disappointed with the lack of prior warning. A glimmer of hope remained as many thought these regulations would only come into effect once it was gazetted, only to be turned away at liquor stores on Monday morning. Wholesalers such as Rooikat Liqours were inundated with customers, who were met with a copy of the substitutions of regulations gazetted on Sunday already.
The gazette echoed what President Cyril Ramaphosa said: The sale, dispensing or transportation of liquor will be prohibited with immediate effect.
The South African alcohol industry voiced its concern with the government’s decision. It said in a statement that, during the nine-week lockdown, the alcohol industry lost R18 billion in revenue and the government lost R3,4 billion in excise tax.
“As witnessed during the initial suspension of alcohol sales, further restricting legal trade will fuel the growth of the illicit market, a fact that is widely acknowledged internationally. It also creates security concerns for liquor outlets. The illicit market is outside the regulatory reach of government and operates mostly uncontrolled. For this restriction to be viable, it must be accompanied by considerably increased law enforcement in this part of the market,” it said.
It also reads that, despite constant engagements, the industry was given no warning about the ban, nor an opportunity
to consult with the National Coronavirus Command Centre before a decision was made. No consideration was given to the immediate logistical difficulties it poses for both suppliers, distributors and retailers alike.
“President Cyril Ramaphosa’s decision is deeply troubling. The liquor industry has a wide and deep value chain employing almost one million people across the country. The decision has serious economic consequences, placing hundreds of thousands of livelihoods at risk. The hardest hit will be the significant number of smaller retailers and taverns,” it continued.
“The introduction of stricter regulations or a further ban on alcohol sales is neither a solution for the industry nor our country’s economy,” said Lucky Ntimane, convenor of the National Liquor Trader’s Council. “The liquor industry has a deep and wide value chain that employs a little under one million people across the country. Any additional restriction on sales would spell a disaster for the industry, as well as the continued loss of excise revenue to the fiscus.
“In addition to the disastrous economic impact, stricter regulations, including shorter trading hours or further restrictions on trading, would likely increase panic buying and overcrowding at retail outlets, increasing the risks of transmission of the virus,” he said.
“Of course, we are also concerned that further restrictions or an outright ban on alcohol sales would lead to a growth in the illicit liquor market. The illicit market does not comply with the measures implemented by the industry and will lead to further irresponsible consumption of alcohol,” Ntimane added.
Kurt Moore, CEO of the South African Liquor Brand Owners Association, said as an industry they are deeply concerned about the surge of Covid-19 infections, however any additional restriction on sales, including an outright ban, shorter trading hours or further restrictions on trading, would likely increase panic buying and overcrowding at retail outlets, which would increase the risk of transmission of the virus.
“In addition to the increased transmission risk, a further restriction in sales would have a disastrous economic impact on the industry and continue to exacerbate the loss of excise revenue. Further restricting the legal trade of alcohol would fuel the growth in the illicit liquor market, which does not comply with the measures implemented by the industry and would lead to further irresponsible consumption of alcohol,” Moore said.