Key players in the lucrative alcohol industry have warned that the industry is bleeding billions of rands in lost revenue due to the ban on the sale of alcohol during the lockdown.
The Beer Association of South Africa, the South African Liquor Brand Owners Association and Vinpro, which represents more than 3000 wine producers, in their submission to government, said the ban on alcohol trade will lead to a surge in the sale of the illicit alcohol.
“We have calculated the economic impact of a loss of sales during the current 3-week
lockdown period, as well as an extension of the lockdown by way of example for another 3 weeks (6-week lockdown period in total),” the three organisations said in their submission to President Ramaphosa and his ministers, dated 8 April 2020.
“In an extended lockdown scenario, the wine,
spirits, ready-to-drink and beer categories will lose R12.6 billion in wholesale revenue, along with a loss of R3.5 billion in excise tax revenue. A continued prohibition on wine, cider and spirits exports from South Africa for a 6-week period will cost the country R1.3 billion in valuable foreign exchange earnings.”
The organisations also warned that farmers who supply thier grapes to the wine industry might not recover from the loss of business.
“The raw materials used for wine production do not have any other commercial use. This means that a loss of wine local sales downstream cannot be mitigated by the wine industry upstream by diverting their crop for alternative commercial use.”
Amongst the recommendations made by the industry is that licensed taverns be granted special dispensation to operate strictly as takeaway outlets – as well as allowing the sale of alcohol via online platforms.
The organisations are also lobbying government to allow beer halls to operate between 9am and 6pm on weekdays and to 4pm on Saturdays.
The story will be updated when government responds.
