South African alcohol industry welcomes partial lifting of alcohol ban but highlights concerns over long-term sustainability of sector

Media Release

  • Industry welcomes President’s decision to allow onsite and offsite consumption
  • Industry calls for collaborative and transparent engagement with Government going forward
  • Industry demands urgent and regular review of ongoing restrictions as the health situation improves

The South African alcohol industry welcomes President Ramaphosa’s announcement this evening to reinstate the sale of alcohol by licenced premised for offsite consumption from Monday to Thursday from 10 am to 6 pm. Further, the President stated that the sale of alcohol by licensed premises for on-site consumption—such as restaurants and taverns—will be permitted throughout the week from 10 am to 10 pm.

In addition, the relaxing of restrictions to allow registered wineries, wine farms, micro-breweries and distilleries to sell alcohol for offsite consumption during normal licenced hours is a welcome step to helping the industry begin its long journey back to recovery.

The industry has always sought ways of collaborating with the Government regarding its decisions on banning alcohol and instead apply more effective alternative measures that address the issues of alcohol misuse while maintaining the livelihoods of the million people whose jobs are dependent on the industry. Tonight, the industry reiterates its call to work together with Government in collaborative and transparent engagement that enables the industry to plan its longer-term sustainable future to safeguard jobs and positively contribute to the economy.

The reinstatement of the alcohol ban for the third time during lockdown announced by the President on 28 December has decimated the industry and threatened its long-term survival.  Moreover, this has led to job losses, a rise in illicit trade and a significant decline in its economic contributions.

The industry has calculated that the decrease in excise tax contribution to the fiscus has declined 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 covered the investment needed in the procurement of vaccines and other measures needed to curb the impact of COVID-19.

South Africa’s alcohol industry has always understood the need to save lives but maintains that the regulations could have been implemented in a more targeted, less damaging manner that alleviates the impact on the healthcare system and helps to mitigate transmission, while still helping to preserve livelihoods. Since the pandemic began, the alcohol industry has implemented numerous proactive measures to address safety at consumer touchpoints and within the trading environment.

Additionally, it has already committed R150 million in harm reduction measures to address the four specific areas prioritised in the proposed social compact: reducing the incidence of binge drinking, drink driving, and underage drinking and gender-based violence. The industry is in complete support of the President as he urges consumers to drink responsibly to avoid a spike in trauma cases or an increase in infections due to reckless behaviour.

Kurt Moore, CEO of SALBA commented post the President’s address, “As an industry, we welcome the President’s decision to ease the restrictions on alcohol sales for on and offsite consumption and are extremely relieved that partial areas of alcohol sales are to be opened up again. However, after this six-week ban that has left the industry on its knees, this development is no quick fix for our long-term economic survival. We call on Government to work together with us to find a workable solution going forward that protects lives, while preserving the livelihoods of around one million people who rely on some form of income from this sector.”

Rico Basson, Managing Director of Vinpro commented, “Tonight’s announcement has long been necessary to one of South Africa’s oldest but most significant industries which has suffered appallingly at the hands of these lockdown restrictions. Sales of alcohol for on and offsite consumption during restricted hours of trading marks the start of the long road to recovery for this sector, but has come too late for many small businesses that have not been able to weather the storm of COVID-19. Additionally, with the harvest for this year’s wine underway, the impetus to create sales for our existing wine stock is all the more pertinent if we are to safeguard our future. We continue to implore our consumers to drink responsibly during the country’s ongoing lockdown.”

The industry pledges its ongoing commitment to strongly support measures to reduce the spread of coronavirus infections and adopt the Government’s COVID-19 regulations, namely, the mandatory wearing of masks, maintaining social distancing, obeying the curfew hours and sanitising regularly and repeatedly.

The industry urges everyone to download the COVID ALERT SA app from either the Apple App or Google Play stores. The industry also urges the public to make use of the hotline to report any violation of the regulations: Consumer Goods Council hotline: on 0800 014 856.

The alcohol industry seeks a social compact with the Government, industry and civil society to continue the sector’s vital economic activity, save businesses and jobs while ensuring its workers’ safety, promote responsible trading and the sensible consumption of alcohol.

Issued by FTI Consulting on behalf of:

The South African alcohol industry includes but is not limited to the National Liquor Traders Council (NLTC), South African Liquor Brandowners Association (SALBA), Vinpro, the Consumer Goods Council of South Africa (CGCSA), retailers and manufacturers.

salba@fticonsulting.com