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• The longer rollout takes, the greater the risk of third wave and new variants, warns Ackerman
Pick n Pay chair Gareth Ackerman is concerned about the slow pace of the Covid-19 vaccine rollout in the country.
The longer it takes, the longer South Africans remain unprotected from the virus, and the greater the risk of a third wave, and the possibility of new virus variants emerging, he says.
SA has not yet started to vaccinate the general population, though people over the age of 60 years have been able to register via the internet on an electronic database for a vaccine.
SA decided not to use its 1-million doses of the AstraZeneca vaccine due to a small study that suggested it would not be effective against mild disease in the variant first discovered in SA, which is the main driver of second-wave infections.
The government and the Treasury also faced lengthy negotiations with Johnson & Johnson and Pfizer vaccine suppliers who had onerous and costly conditions on contracts, ensuring the drug companies did not face liability from sideeffects sustained by people who are vaccinated, but instead pushing the costs on to the state.
Many business people have called for more transparency over the rollout.
Speaking at the retailer’s annual results, Ackerman said: “The government needs to communicate clearly and frequently to keep citizens informed and trusting the process.”
Pick n Pay, which has a distribution network of almost 1,900 stores in SA, has joined companies such as Distell in offering support to the government, “to do whatever we can to assist in the efficient distribution of the vaccine when it becomes available”.
The distribution of the vaccine has been put out to tender.
Ackerman said the government has to be more transparent about the vaccine rollout and its response to Covid-19.
He criticised the decision to ban alcohol sales for four days over Easter and called for more transparency behind the decision-making process.
Ackerman has been outspoken about the alcohol ban, especially when it stopped consumers buying liquor at retail stores, but allowed them to visit crowded restaurants or shebeens to drink.
‘RELIABLE DATA’
“Quite how allowing people to drink at bars, restaurants and taverns was somehow safer than having a glass of wine at home was never made clear.”
He called for “decisionmakers to start looking more closely at available and reliable data to make more informed, evidence-based policy decisions and communicate this openly and clearly, to earn the confidence of South Africans and avoid making political decisions during a state of disaster”.
Ackerman also bid farewell to CEO Richard Brasher, who had been at the helm of Pick n Pay for eight years, and thanked him for his “enormous contribution and for the teamwork and integrity, and putting people first”.
“Fittingly, your final year has been the best. Just when the company needed strong leadership, you have calmly and skilfully steered the company, our customers and our people through unprecedented challenges,” Ackerman said.
The Pick n Pay founder, 90-year-old Raymond Ackerman, attended the results in person to say goodbye to Brasher.
Brasher, who joined from the UK, remained at Pick n Pay for an extra year to guide it during the pandemic. Dutch national Pieter Boone took over as CEO on Wednesday.
In his first address, Boone said he is “very optimistic” about opportunities for Pick n Pay in SA and abroad.
He aims to make Pick n Pay the first choice for customers, accelerate the growth of the Boxer business and grow the online business.
He also wants to “find a sustainable route in the rest of Africa”.
Massmart, owner of Game and Makro, has pulled out of four countries on the continent, while competitor Shoprite has closed stores in Kenya and sold its Nigerian business, but remains in some African countries.
Pick n Pay has low exposure to Africa but is profitable on the continent and still sees this as an area for growth.
Boone said he is taking over “a stable, professional, well-run company” under Brasher.
Pick n Pay shares were up 0.78% to R54.40 on Wednesday. childk@businesslive.co.za
THE GOVERNMENT NEEDS TO COMMUNICATE CLEARLY AND FREQUENTLY TO KEEP CITIZENS INFORMED
That’s series,” were CEO Richard Brasher it,’ s the parting end words of the as he ended his final results presentation after eight years in charge of Pick n Pay.
“We are back,” he told the retailer’s founder, 90-year-old CEO Raymond Ackerman, sitting in the audience for Brasher’s final curtain call, speaking of the turnaround under his leadership. Dutch national Pieter Boone has taken over as CEO.
SA consumers have a lot to thank Brasher and other SA retailers for as grocers continue to absorb rising food prices by cutting operating expenses. Consumer price inflation was about 4% in 2020, but in its financial year, internal price inflation at Pick n Pay was 3.8%.
Pick n Pay, like the rest of SA, is faced with a more costly and unreliable electricity supply. It has saved R2bn in power costs in the past few years, thanks to more efficient use in stores and distribution centres.
The company said it had reduced expenses by R600m in the past two years by improving its supply chain, cutting water usage and reducing transport expenses, which make up 50% of its supply chain costs.
It is investing its savings in price promotions as food prices are set to rise this year due to globally high maize prices, a core element in animal feed.
Yet despite retailers’ role in helping consumers to be able to afford food, the government does them no favours. Pick n Pay lost about R800m in profit due to illogical lockdown bans on the sale of cigarettes, alcohol and even clothing, kettles and hot pies. Perhaps the government could make life less onerous for retailers who keep us fed.
WHO WILL WIN WAGE TUSSLE AT ESKOM?
As wage negotiations at Eskom approach, there can only be one real winner. On one hand, there is a bankrupt power utility that is struggling under the weight of a R480bn debt pile and depends on cash injections from the fiscus for its survival. On the other hand, there are Eskom’s employees, with the majority union being the National Union of Mineworkers (NUM), who will argue that workers should not bear the brunt of Eskom’s maladministration.
And it would seem they haven’t. According to MyBroadband, Eskom pays the thirdhighest average salary in SA — R785,557 a year. The NUM says it will be negotiating for a 15% salary increase at Eskom to sign a three-year deal until 2024. Inflation, meanwhile, increased to 3.2% in March.
It’s hard to guess what the outcome will be, but history tells us the wage settlement cannot be 0%. That’s because of the precedent set by public enterprises minister Pravin Gordhan, who in the last round of wage negotiations in 2018 overruled former Eskom CEO Phakamani Hadebe, who had refused to offer any increase at all.
Former Eskom chair Jabu Mabuza later conceded that Hadebe’s approach had been “tactically wrong”. In the end, Eskom signed a three-year deal with salary adjustments of 7.5% in 2018/2019, 7% in 2019/2020 and 7% in 2020/2021.
Since then the world has been through a pandemic and Eskom’s financial position and SA’s growth prospects have deteriorated. These wage talks, and others in the public sector, will again pit economics against politics, and this time there can only be one true winner.