Alcohol industry shocked by government’s U-turn

But is still willing to talk, and offer ‘unanimous’ support to the government.
The liquor industry was not ready for the ban on liquor. It was still hoping to engage on social issues. Image: Michel Bega, Citizen

The embattled liquor industry says President Cyril Ramaphosa’s immediate decision to ban the sale of alcohol will lead to a significant amount of job losses in the industry.

According to the South African Liquor Brand owners Association (Salba), chief executive officer Kurt Moore the industry has over a million workers and the ones that will be the hardest hit are smaller retailers, wineries and tavern owners.

It was already estimated that the SA wine industry, which employs around 300 000 people, would lose close to 18 000 jobs and that nearly 80 wineries and 350 wine grape producers would close their businesses in the next year, due to the previous five-week ban on exports and nine-week ban on domestic wine sales. The industry has also suffered direct losses of close of R3 billion during this time.

“The Government’s decision has serious economic consequences, placing hundreds of thousands of livelihoods at risk…the immediate enforcement of the ban will have other unintended consequences which includes further job losses throughout the value chain,” Moore says.

He says that during the nine weeks that alcohol was banned the alcohol industry lost R18 billion in revenue and R3.4 billion in excise tax.

He explains that the excise tax was lost from “the growth in sale of illegal alcohol products which don’t pay taxes”.

Ramaphosa said during his address to the nation on Sunday evening, that the reason for re-introducing the ban was to take the pressure off the health system. The country had seen a surge in infections since the ban was lifted, June,1 and trauma units have seemingly become crowded.

Currently, there are 276 242 positive cases identified, with 134 874 recoveries and 4 079 deaths.

Taken by surprise

Despite the surge in infections, the industry was just as shocked when they heard the President announce the ban on alcohol.

The alcohol industry claims has engaged continuously with the Government and especially the Department of Trade, Industry, and Competition (DTIC) over the past month regarding the efforts put in place to ensure compliance with regulations (limited trading days and hours) as well as adherence to the safety protocols informal retail and taverns.

“Despite these engagements, the industry was given no warning about the ban, nor an opportunity to consult with the National Coronavirus Command Centre (NCCC) before a decision was made and no consideration was given to the immediate logistical difficulties it poses for both suppliers, distributors and retailers alike,” Moore says.

“Despite our shock and dismay at the abrupt decision by Government, we will urgently take up our deliberations with them again with renewed energy,” says Rico Basson, Vinpro managing director.

The South African alcohol industry including the National Liquor Traders Council, South African Liquor Brandowners Association (SALBA), the Beer Association of South Africa (BASA), Vinpro, the Liquor Traders Association of South Africa (LTASA) and manufacturers is “disappointed” with the decision to reinstate prohibition of the sale of alcohol.

“Ramaphosa’s decision to reinstate the nation-wide ban on the sales, dispensing, and distribution of alcohol with immediate effect is deeply troubling. The industry shares with the Government its concerns regarding the increase in Covid-19 infections and will continue to support efforts to curb this unprecedented health emergency,” Moore says.

Closed for sale of booze but open for talking

The industry says it has been committed to prioritising lives and safeguarding livelihoods across the sector during this pandemic while ensuring that we adhere to safety, responsible trading, and the sensible consumption of alcohol.

“We will continue to offer unanimous support in placing its assets at the availability of Government in fighting this pandemic,” Moore says.

The industry- initiated contact with the government on 6 July to “create a social compact that drives behavioural change regarding the use and consumption of alcohol”.

“We are awaiting a response,” Moore says.

Moore says the industry recognises the need to balance the risk to lives with maintaining livelihoods.

“In addition to the economic consequences that threaten livelihoods, the contribution by the industry to the fiscus will be severely compromised, at a time when tax revenue is coming under increased pressure,” Moore says.

Suggested solutions

Moore says while they acknowledge the urgency of the situation, it is crucial to understand the complexity of alcohol-related trauma so that they maybe able to sharpen the focus on the most effective interventions and also measure their impact against a shared understanding of the facts and the problems.

“This requires access to health and alcohol-related information in private and public sector hospitals and clinics which government has never shared with industry,” Moore says.

The industry believes the best approach is to target problematic drinking to manage and achieve long-term, lasting changes.

“The regulation imposed has a significant negative economic impact and could have been designed in a less damaging manner, but with the same alleviation of the impact on the healthcare system,” Moore says.

They call for behavioural change regarding the use and consumption of alcohol though countering unacceptable and irresponsible consumption; intervention programmes and enforcement of policies to address:

  • Gender-based violence (GBV) and effect behavioural change;
  • firm interventions against drinking/driving and walking with renewed practical support for enforcement in collaboration with the Department of Transport and the RTMC (Road Traffic Management Corporation) and;
  • dealing with illicit trade and enforcement. In this way, we can work together to create a social compact that not only works to save lives but also preserve livelihoods.

It could have been worse

Business Unity CEO, SA Cas Coovadia, says he is pleased that the Cabinet agreed not to reintroduce higher levels of lockdown in hot-spot areas.

“That would have been devastating to the economy,” Coovadia says.

“We have to recognize that alcohol abuse, since the relaxation of alcohol sales, has led to a substantial increase in trauma cases, which puts a severe strain on an already pressurised health care sector”.

“However, abuse will continue through alcohol sales in the illicit market, and government must demonstrate resolve and action to deal with the illicit market,” Coovadia says.

Coovadia encourages that there should be a priority in addressing the pandemic expected surge in cases.

“[D]uring the peak and [we] must allocate maximum health capacity to Covid cases, so it is inappropriate to disagree with that. There will undoubtedly be a significant negative impact on the alcohol industry, including loss of jobs as a result of reintroducing a ban on sales. We need to put our heads together to find concrete and demonstrable ways to drastically reduce abuse of alcohol because that is the crux of the problem,” Coovadia says.

The industry is still yet to find out like everyone else when the ban would be lifted- again.

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Offer ‘unanimous’ support to the government- thats where the problem lies, support and respect is earned, the government have done nothing up till now that would make any person of sound mind to support them. Their decision making throughout this lockdown as been manical to say he least. By their own ‘reasoning’alchohol is being blamed as the tool causing the hospital admissions, if thats the case perhaps they should ban cars as well because trauma unit admissions have too picked up because of more accidents since they relaxed the ban on driving? Its time for business and their member organizations to start saying enough is enough. The ANC SA government cannot be trusted in any shape or form, full stop.

Go and read Ivo Vegter’s devastating take-down of the alleged spike in hospital admissions on the Daily Friend’s website. The “huge spike” works out to about 2 extra cases per hospital per day, mostly in the ER to get stitched up. As Vegter points out, if hospitals can’t handle 2 extra patients in the ER per day, the virus is the least of our problems.

@Incitatus You rounded down, naughty naughty.

There you have it

South Africa is no longer a democracy

On 13 August 1961 the East Berliners woke up and overnight they were separated from their friends, family,work, even homes. The wall came down 30 years later after untold human misery. On 26 March 2020 South Africans went to sleep in a democracy and on 27 March 2020 woke up in a communist dictatorship. How long will our misery last, is the only question left.

The ANC could not pay salaries to its employees last month. Elements within the ANC have connections to smugglers. Who would benefit from a sudden ban on liquor, and which organization desperately needs cash?

Connect the dots.

…our president is pathetic …being led on a leash by Nokasana Zuma

But I guess being showed the money, Cyril can make one can presume him walking with his tail between his legs

And the tail is part of the spine!!!!

Cas, a few arguments needs clarity please: 1) for generations wine growers and other alcohol related businesses has relied on the industry for income. CR/zweli/ndz unilaterally decides to close the national sales of alcohol – but without a compensation and b a date when the industry can commence it’s activities again. This basically means I can not provide for my family – is this even constitutional? 2) if government have to decide to for its citizens when and where to consume alcohol because some citizens are not qualified to think for themselves how on earth could those same citizens be allowed to vote for a national government??? Thus the only conclusion is that our voting methodology in SA is flawed. 3) cr/zweli/ndz are worried over 40,000 c19 deaths, but seems not to worry about 400,000 possible malnutrition related deaths in the near future and possible unrest because its money will dry up. No economy no money. 4) theres not one soe working as it should but we must abide with your decisions about my business? 5) what one can deduce without doubt is that the current government does not have the sufficient capacity to covern SA. The culture of the current government does not attract the kind people to succesfully govern. The only reasonable assumption is that something will blow out in the near future. One thing we know is that the current government will not be able to manage that crises.

You touch the vote.

I would like to see the voting system work differently.

I say , if you at least PAY TAX , then you can vote. Essentially the government governs , by deciding how much tax we pay and then how to spend that money.

So why would someone that doesn’t contribute to that pot have the right to vote ??? Makes no sense.

You might say there aren’t enough tax payers , so they minority will then decide on who is president (black and white , as these numbers in modern day SA are basically equal so it’s not a race thing)

Well if the small handful of taxpayers make the call , I can promise you we will have more and more taxpayers every election and eventually everyone will have a vote as there won’t be unemployment….

The experiment I would like to see is that one could buy and sell people’s votes. Will Johnny rather vote or take R1500 cash? Will Mary be willing to buy my family’s four votes for R10,000?

How much value do different people put on their vote, or the vote of somebody else…

Most people in the country pay tax in one form or another, either through VAT or the excessive fuel levy. So the criterion would need to be different. Perhaps limit it to Income Tax?

That’s how we end up in a dictatorship. A handful of people make arbitrary decisions affecting the whole country. The mechanism, information and discussions are hidden. They are effectively running the country.

People think that power cannot be used abused, if it comes from the right source, i.e. from the people (voters), to parliament. It’s not true. The *only* thing that stops power from being abused is the limitations you put on it. In our cause, there are no limitations on the command council.

Milo

I disagree . Nothing to do with a dictatorship.

The right to vote is bases on your status as a citizen and being 18 years old. Why is that ? What is the merit for that argument. Its the democratic principal, I am not sure that is still relevant in the 21st century.

If tax payers are the ones providing the money to run the country with, then they should decide on who gets to spend that money on their behalf.

Not a dictatorship , they will in fact hold government accountable by voting for someone else if it goes south.

Our biggest problem is that there is no threat to the ANC, they don’t have to be accountable because they’ll just keep on winning elections.

A devious bunch of lowlife floaters.

Was to be expected and I stocked up to the rafters.

What do you expect when decision makers believe there is a benefit to be had by putting your bed on a few bricks?

Is it not high time that industry follow the taxi associations and stop trying to be nice via attempts to broker a deal that will not materialise?

How long will industry take to learn from the taxi associations in that it is action; not negotiation, that the current regime understand?

… the privileged are here moaning and crying over alcohol!

Get over yourselves.

That is a vast over-simplification, try reading before commenting. The ban will cost many people their livelihoods. My sister-in-law, to give one example, works as an accountant for a Cape wine farm. They are now prevented from earning a living by this ban. Combined with the already ham-strung tourism industry (as a lot of their customers are tourists), this is going to cost people their JOBS. Restaurants, too, will be negatively affected as alcohol brings in a sizable part of their profits. Really shouldn’t have to be explained but there you go…

My Money2020, are you seriously suggesting that only the privileged drink alcohol? You should come to my part of SA on a Saturday morning and test your theory. May I suggest that you find a nice quiet spot on a road leading to the less privileged communities and see if you perhaps come to another conclusion. But more importantly, while you are sitting there, consider the implications of a government usurping more and more power. Try and look down the road to a utopia where our inept government decide, on your behalf, what you are allowed to think, do, hope and dream. If that thought doesn’t cause shivers down your spine, then I completely understand why you would post your comment.

Go and comment somewhere where your inablity to grasp complex issues are appreciated. The grown-up are talking here.

Grote Griet!

A decision has been made by the goverment, communicated by the President, regarding a virue that kills people. Good decision in view of the pandemic. There are going to be casualties either way.

why is cyril and cele so obsessed with booze and cigaretts? were they burnt with cigaretts or attacked with beer bottles when they were kids or what?

the alchohol isnt the problem,its the individual who cant handle it.

Alcohol is low hanging fruit for the government at the expense of jobs, but they are not affected, so they don’t care.

Can’t get my head around why they would allow taxis to operate at 100% capacity, given the current escalation trajectory, knowing fully well that they can’t comply with physical distancing. Digging a grave for your own people – ATROCIOUS

Eish do’nt worry cadres and friends were given a heads up to stock up with puzza before Sunday , heh, heh heh

So an entire industry is shut down because a few can’t behave. Those that should maintain law & order have failed – from the boss down. Criminally irresponsible government!

End of comments.

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