Government should justify the continued alcohol ban as COVID-19 cases decline

Media Release

  • Except for the citation of social media posts from hospitals, no details are provided on the caseload versus the hospital capacity available
  • No Government Ministry is taking responsibility to explain to the public and the industry what justifies the continued ban

With the number of new COVID-19 cases continually declining for the past two weeks, the South African Liquor Brand owners Association (SALBA) has urged the Government to be transparent about the justification for the continued prohibition of formal alcohol sales in the country.

President Cyril Ramaphosa banned liquor sales on 28 December, stating concerns about the sharp rise in COVID-19 infections. He further extended the alcohol sales prohibition on 11 January, saying that the health system needed to preserve the maximum capacity to handle the surge in COVID-19 admissions. Except for hospitals’ citation of social media posts, no details were provided on the caseload versus the hospital capacity available.

“Government justified the current alcohol ban based on the projected rise in new COVID-19 cases. With the current downward trend in the number of new cases and a recovery rate of 87,6%, Government has to explain why the current alcohol continues with no end date in sight,” said Sibani Mngadi, Chairperson of SALBA.

He urged the Government to be transparent to the SA public and the industry on the justification for of alcohol sales’ continued prohibition.

“No Government Ministry is taking responsibility to explain to the public and the industry what justifies the continued ban, and what would be the basis and timeline for a review of this ban. This lack of transparency and accountability from Government is forcing major companies in the sector into further cost-cutting measures, which means more job losses,” said Mngadi.

Over the past week, Heineken reduced its staff by 7%, and South African Breweries suspended the contracts of 550 workers while Distell reduced its contract staff by 220. The industry has requested a deferment of excise liabilities to which the Government has not formally responded to at the time of this press release.

“Alcohol excise tax contribution to the Government has declined by more than 28% from R47 billion in 2019/20 to R34 billion in 2020/21. This R13 billion loss in alcohol tax revenue could have easily compensated for the investment needed in the procurement of vaccines and other measures needed to curb the impact of COVID-19 on our society,” said Mngadi.

He said the only beneficiaries of the current ban are illicit alcohol smugglers charging consumers exorbitant prices, robbing both the industry and Government of much-needed sales and tax revenue.

About SALBA

South African Liquor Brand owners Association is a trade association representing alcohol manufacturers and distributors in SA. Its membership includes major beverage alcohol companies such as Distell, Diageo, Pernod Ricard, DGB, KWV, and RGBC.

Issued by FTI Consulting on behalf of SALBA

Salba@fticonsulting.com