Brewer battles booze blues

SAB: ‘WORST QUARTER IN HISTORY’; 250 000 JOBS AT STAKE

Knock-on effect on value chain severe as glass producer spends R8m a day.

The latest ban on alcohol sales has left the operating profit of SA Breweries “basically at zero” and “this has been the worst quarter we’ve had in our history”, says a senior executive.

AB InBev’s (SAB’s parent company) Africa zone president Ricardo Moreira told an online meeting yesterday the reinstated booze ban had led to alcohol sales falling by 60%, threatening 250 000 people in the business and its value chain.

But even if the ban were lifted tomorrow, legal businesses would be in for an uphill struggle to gain back ground taken by bootleggers, participants heard.

The online meeting was to consider the broad impact of the ongoing ban, with AB InBev “fundamentally” disagreeing with the government’s response to the Covid-19 crisis.

The discussion centred on whether shutting down an industry and associated value chains was justifiable, based solely on the potential impact the sector has on a shortage of hospital beds.

The second ban on alcohol sales in South Africa came with no warning, discussion or room for the industry to make alternative plans. As a direct result, more than 250 000 people’s livelihoods are at stake within SAB’s value chain.

A total of 14 112 people are employed within the SA Liquor Traders Association (Salta), and between 100 000 and 120 000 jobs are on the line in the tavern industry, with a knock-on effect.

The sector’s value chain, from detergent suppliers to waste pickers, is also negatively affected.

AB InBev recently made the call to reduce investment in South Africa by R5 billion. A total of 97% of SAB’s value chain is sourced in SA and makes a major contribution to the country’s annual gross domestic product.

Chief executive of Consol Glass Mike Arnold said the company was spending R8 million a day on energy to keep furnaces running.

The company is 85% dependent on the alcohol industry.

The increased threat of the deindustrialisation of the glass packaging sector would mean SA spending about R12 billion a year on imports for glass products.

But if the alcohol ban continues, Arnold said suppliers in sectors such as water filtration, silica sand, fertilisation and detergents will also be severely impacted.

Salta chair Sean Robinson said business within the insurance, IT and financial sectors would be affected as well, with independent business owners no longer able to keep up with costs.

Salta represents 1 410 independently owned liquor outlets and businesses.

Lucky Ntimane, the convener of the National Liquor Traders Council, said 34 500 taverns were represented by the newly formed council.

He said since 1 June, about 8 000 taverns could not operate and he anticipated a further 12 000 would stay closed. Over half of its taverns were run by women, who are often the breadwinners. –

More than half of the taverns are run by women, who are often the breadwinners