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SAB cancels R2.5bn investment

After latest alcohol ban.
Image: Waldo Swiegers, Bloomberg

South African Breweries, part of Anheuser-Busch InBev, has cancelled a further R2.5 billion of investment earmarked for 2021 following a third local ban on alcohol sales in the country, it said on Friday.

SAB’s cancelled investments in South Africa in relation to the ban now total 5 billion rand. In August, the maker of Carling Black Label and Castle Lager beer cancelled 2.5 billion rand of planned expenditure following a second alcohol ban.

South Africa has banned alcohol sales as part of efforts to free up space in hospitals burdened with alcohol-related injuries for Covid-19 patients.

As a result, more than 165 000 people in South Africa have lost their jobs and about 30% of local breweries have been forced to shut their doors permanently.

“Given the material impact that this third ban on the sale of alcohol has on our business and the possibility of further bans, we have no choice but to halt these investments for the foreseeable future,” SAB’s Vice President of Finance, Richard Rivett-Carnac said in a statement.

The cancelled investments relate to upgrades to operating facilities, product innovation, operating systems as well as the installation of new equipment at selected plants, the brewer said.

“This decision will impact on the profitability of and number of jobs created by the companies that would have worked with SAB to execute the capital investment plans,” it added.

SAB is currently in court challenging the government’s decision to re-impose the ban.

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The R2.5bln “investment” would’ve caused billions more in damages.
The net impact of the alcohol industry is negative after the costs of cleaning up its trail of destruction is factored in: acts of violence, accidents, murder, unwanted pregnancies, rape, GBV, broken homes, addiction, marital strife, lost productivity absenteeism,.. etc

SAB has a great record in distributing its product — but paid very little attention to the damage it caused.

Covid allowed a great experiment to be undertaken: remove alcohol and the alcohol induced violence stops!

Trauma wards in Chris Hani hospital had no victims in all its history.

South African’s cannot consume liquor responsibly; something that was the direct result of colonialism and apartheid. [1]

This was plain to see. SAB deserves most of the blame. They only cared about maximizing profits.

It should be clear that alcohol was too easy to obtain; it was treated like a soft-drink and not a dangerous drug that needs more regulation.

SAB cancelled the investment because it realized that post-Covid the industry will be smaller and more regulations are on the way.

[1] Twisted tale of alcohol and apartheid
https://www.news24.com/news24/Archives/City-Press/Twisted-tale-of-alcohol-and-apartheid-20150429

End of comments.

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