The South African alcohol industry concerned about continued restrictions to purchase for off-site use at Level 1

Media Release

South Africa’s alcohol industry welcomed today’s announcement by the Government to place the entire country on Alert Level 1, but raised concerns about the continued restrictions for off-consumption sales of alcohol which will now include Fridays and the curfew being extended to midnight. These measures will come into effect at midnight on Sunday, 20 September.

Kurt Moore, CEO of the South African Liquor Brand owners Association (SALBA), said while the industry acknowledged the challenges facing the Government in its efforts to stem the pandemic and prevent a second wave of infections, we must begin rebuilding the economy.

“Extension of trading days to Friday for off-consumption and two hours extension for on-consumption to midnight is a step in the right direction, but not far enough for our sector that is struggling to recover from the two waves of bans on formal sales of alcohol during the lockdown,” said Moore.

With most of the indicators tracking the spread and impact of the pandemic showing a positive decline, Moore emphasized that the key priority for the country is to focus on the economic recovery plan as discussed at Nedlac. He added that this is why the sector was disappointed that the Government did not allow off-consumption outlets to trade in terms of their licensing conditions or at least engage in some trade on weekends.

“Critical to the economic recovery is the efficient collection of existing revenue and the urgent need to close tax leakages from illicit alcohol trade. Limitations in the weekend off-consumption sale of alcohol continue to provide an opportunity for the illicit networks to expand,” said Moore.

The illicit alcohol market accounts for an estimated 15% of alcohol sales by volume and results in a fiscal loss of R6.4 billion to the economy.  The alcohol industry is committed to working with SARS to find solutions to the problem of illicit trade which poses a mutual revenue risk for both Government and the industry.

The industry also reiterated its commitment to partnering in a new social compact with Government to save businesses and jobs in the sector. The sector has committed an investment of R150 million into direct harm reduction interventions and programmes over the coming year to assist the Government in dealing with the health and social burden of alcohol misuse.

“As an industry we recognise that we have a collective responsibility to protect all our livelihoods as part of the alcohol value chain. Consumers, equally, have a responsibility to behave appropriately and not expose themselves and others to unnecessary harm and potential infection,” said Moore.

Lucky Ntimane, Convener of the National Liquor Traders Council, welcomed the decision. “We welcome the two-hour extension in trading hours for taverns. This provides an opportunity for the sector to continue to recover. The amendment to 50% capacity instead of 50 people only, provides better variance of application of the rules between outlets with big or small capacity for patrons.”

Rico Basson, Managing Director, VinPro, said, “The wine sector is a major contributor to domestic and international tourism to SA. We appreciate that there is a great consideration of tourism as a sector to drive economic recovery. Relaxing the rules on on-consumption as well as indoor and outdoor events should allow us to explore ways to reignite our sector.”

However, Basson said: “The continued limitations on off-consumption on Saturday and Sunday is disappointing for the 530 wineries  that rely on direct sales from cellar door for home consumption within strict COVID protocol. This at a time when the wine industry, with a significant number of SMME’s,  is in dire need of disaster recovery, job retention and growth.”

Patricia Pillay, CEO of the Beer Association of South Africa, said, “We are appealing to consumers to play their part in changing our drinking culture and assist in enforcing these measures. We are calling on consumers to moderate their use of alcohol and to behave responsibly as consumers. We advocate a zero tolerance for drinking and driving, and the need to take steps to reduce the numbers of drunk pedestrians on the streets.”

NOTE

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

Issued by FTI Consulting on behalf of the South African liquor industry. For interviews, or further information, please contact:

salba@fticonsulting.com