South African alcohol industry formally seeks reasons for the intended ban of alcohol sales

Media Release

  • There is no scientific rationale for increasing the size of gatherings and banning alcohol sales
  • The decisions on the size of gatherings are directly against the recommendations of Nedlac in minimising the risk of the third wave of COVID-19 pandemic

The South African alcohol industry notes with grave concern media reports that the Government intends  to ban alcohol sales during the coming Easter weekend while at the same time increasing the permitted size of gatherings up to 1 000 indoors and 5 000 outdoors.

The industry is to formally seek reasons for this intended decision, including access to any scientific information that justifies the decision from the Ministerial Advisory Council on COVID-19 and/or any other source.

SA Liquor Brandowners Association (SALBA) Chairperson Sibani Mngadi said: “The only outcomes the country can expect from the decisions to increase gathering and ban alcohol sales is the hastening of the onset of the third wave of COVID-19 pandemic while further collapsing the struggling economy.”

Mngadi urged the Ministerial Advisory Council to distance itself from these clearly unscientific decisions.

“The industry proposal to Government through Nedlac was to reduce the size of gatherings to minimise the rate of infection. The second proposal from Nedlac was to keep most business sectors open to support economic recovery. If the reports are true, the Government will be going directly against Nedlac proposals by yet again shutting down the alcohol sector impacting on its R173 billion contribution to the GDP of the country,” said Mngadi.

An assessment of the three alcohol bans’ economic impact in 2020, including the five-week ban between 29 December 2020 to 2 February 2021, revealed the damaging financial implications of the Government’s prohibition decree.

According to the assessment, the tax revenue loss (excluding excise) to Government fiscus from the value chain arising from the bans amounted to R29.3 billion (equivalent to 2.3% of tax revenue), and direct excise tax revenue lost across the nation was R8.7 billion (equal to 21.2% of excise revenue).

The country’s GDP loss was approximately R51.9 billion—1.0% of the total GDP measured at market prices due to the three bans.

“Job losses as a result of these unjustified bans are exceptionally damaging to society and the economy. More than 200 200 jobs, equivalent to 1.22% of national jobs in the informal and formal sectors, are under threat due to the bans,” said Mngadi.

 

Issued by FTI Consulting on behalf of:

South African Liquor Brandowners Association (SALBA)

For interviews, or further information, please contact:

salba@fticonsulting.com