- Alcohol bans have cost the economy R51.9 billion in GDP loss, with 200,000 jobs at risk
The South African Liquor Brandowners Association (SALBA) welcomes the step by Government last week to publish some of the advisory notes of the Ministerial Advisory Council that informed various decisions of the National Coronavirus Command Council (NCCC).
SALBA believes that this is an important step in creating transparency on the basis for the decision of the NCCC at various stages of the lockdown which have had significant social and economic impact for the country.
However, SALBA is concerned that from MAC Advisory Notes available, there is no recommendation for the third ban of alcohol sales that was implemented by Government from 28 December 2020 until 01 February 2021. During this period, all sales of alcohol were banned and transportation of alcoholic beverages prohibited.
SALBA Chairperson Sibani Mngadi said it was disturbing that Government was not using the recommendations from its own community of health experts.
The MAC recommendations for the December festive period, for example, stated alcohol sales for off-site consumption should only be restricted to Mondays to Thursdays between 10 am and 6 pm, and wine farms and wine-tasting venues should continue to operate.
“Despite the endorsement of this by the Department of Health, the government imposed a complete ban on all alcohol sales. This had a hugely detrimental impact on the industry,” said Mngadi. “SALBA has repeatedly called for the reasoning behind the decisions to prohibit or limit the off and on-consumption sales and to understand better the thinking that informs restrictions of the off-consumption channel.”
The five-week prohibition on alcohol sales imposed in late December severely impacted the tourism, hospitality and liquor industries. These sectors were already hard-hit by previous bans and other restrictions, which the government justified on “scientific” grounds to slow the spread of the virus and reduce hospital admissions.
“We have continually confirmed our willingness to work with the government with the common objective of limiting the impact of the COVID-19 pandemic and putting the South African economic trajectory on a growth path,” he said. “We were assured by the President that decisions were based on recommendations from the scientific advisers on the MAC.”
Mngadi said the multiple bans on alcohol sales implemented during 2020 and 2021 had been a national socio-economic disaster. The cumulative impact of the bans put 200 200 jobs supported by the alcohol value chain at risk in the nation’s informal and formal economy. Sales revenue lost as a result of the bans was approximately R36.3 billion. The country’s annualised GDP loss due to the prohibitions is approximately R51.9 billion, and the tax revenue loss (excluding excise) to the fiscus from the value chain arising from the bans amounts to R29.3 billion.
The alcohol industry is committed to playing its role in the economic recovery of SA. It seeks, in particular, a social compact with the government, industry, and civil society to promote responsible trading and sensible alcohol consumption. Open and transparent discussions on strategy and implementation should be the starting point.
Issued by FTI Consulting on behalf of:
Issued by FTI Consulting on behalf of the South African Liquor Brandowners Association (SALBA). For interviews, or further information, please contact: