The South African Agri-Initiative (Saai) is the first body in the alcohol industry to take the South African government to court to challenge its controversial Covid-19 liquor ban.
The ban on the sale of liquor products was initially instituted in late March when the country entered a strict lockdown to curb the spread of the coronavirus. It was lifted in June and reintroduced on July 12.
Saai, representing over 120 farmers in the country, on Monday applied to the Pretoria High Court for an urgent hearing, calling the ban “irrational, arbitrary and unreasonable”.
In its court papers, it detailed the devastating effect the continued ban is having on the industry’s revenues and on the livelihoods of its employees.
Open up wine restaurants
It said the ban is also affecting wine farms’ revenues by preventing wine tasting at cellars and in their restaurants, pointing out that many of the farmers are also restaurateurs themselves, or rent their facilities to independent restaurant operators.
“Many wine farmers in the Western Cape operate as a family business – some over many generations – which are predominantly small- and medium-sized enterprises,” it said.
The ban has had a significant negative impact on their revenue, and Saai would like to see their normal business operations reinstated. It said the farmers and restaurateurs are struggling to pay waiters, chefs and store managers, and are barely keeping afloat.
“The commercial impact of Covid-19 is far less on the liquor industry than on local wine, of which the financial [success] depends on South Africa sales. The wine farm industry cannot survive the devastating impact of a total ban of local wine sales for the four to six months.”
It also pointed out that it is “irrational” to keep the on-site consumption of alcohol ban in place while allowing restaurants and hotels to reopen and serve meals to their patrons.
“The continued ban on the sale of wine for [the] purpose of on-site consumption on wine farms, restaurants and in hotels had been irrational and the applicants commenced the preparation of the application papers for urgent relief,” it said.
It adds that the same health and hygiene protocols for serving meals can be applied in respect of the serving of wine for on-site consumption.
It also questions whether the outright ban on the sale and transport of all liquor is reasonable and justifiable as contemplated by Section 36 of the Constitution, as it cannot be answered without considering the right of wine farmers to produce and sell wine. It further questions the impact of the government’s fight against the pandemic.
Extent of the impact
According to the SA Wine Industry Information & Systems (Sawis) executive manager Yvette van der Merwe, the wine industry lost R200 million per week on exports during the five weeks of no exports and is continuing to lose R300 million per week in local sales – and this is just the direct impact.
She says indirect costs – such as lost reputation internationally, listings, shelf space and relationships built over 30 years – are incalculable.
And because the impact on the wine industry has been so bad, Sawis estimates that more than 80 wineries and almost 350 producers may soon be out of business, says Van der Merwe. This would result in 18 000 workers becoming unemployed, with 4 000 of these being farm workers. This equates to 15% to 20% of the sector.
“The implications of the lockdown are irreparable. As mentioned before, some businesses will close and thousands of people will lose their jobs – across production units, wineries and also in the tourism sector.”