Alcohol industry shocked by government’s U-turn
The embattled liquor industry says President Cyril Ramaphosa’s immediate decision to ban the sale of alcohol will lead to a significant amount of job losses in the industry.
According to the South African Liquor Brand owners Association (Salba), chief executive officer Kurt Moore the industry has over a million workers and the ones that will be the hardest hit are smaller retailers, wineries and tavern owners.
It was already estimated that the SA wine industry, which employs around 300 000 people, would lose close to 18 000 jobs and that nearly 80 wineries and 350 wine grape producers would close their businesses in the next year, due to the previous five-week ban on exports and a nine-week ban on domestic wine sales. The industry has also suffered direct losses of close of R3 billion during this time.
“The Government’s decision has serious economic consequences, placing hundreds of thousands of livelihoods at risk…the immediate enforcement of the ban will have other unintended consequences which includes further job losses throughout the value chain,” Moore says.
He says that during the nine weeks that alcohol was banned the alcohol industry lost R18 billion in revenue and R3.4 billion in excise tax.
He explains that the excise tax was lost from “the growth in the sale of illegal alcohol products which don’t pay taxes”.
Ramaphosa said during his address to the nation on Sunday evening, that the reason for re-introducing the ban was to take the pressure off the health system. The country had seen a surge in infections since the ban was lifted, June,1 and trauma units have seemingly become crowded.
Currently, there are 276 242 positive cases identified, with 134 874 recoveries and 4 079 deaths.
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