SA’s independently owned liquor stores have lost more than 20% of their workforce as a result of restrictions on the sale of alcohol as they scrambled to make up for nearly R9bn in lost sales since early 2020.
Labelling the restrictions discriminatory, uncompetitive and unsustainable, the Consumer Goods Council of SA (CGCSA) on Thursday released findings of a research report it had commissioned on the effect of the Covid-19 regulations on the liquor industry, particularly as it relates to off-site consumption sales.
“The government to date has not been able to justify the discriminatory behaviour meted out on the liquor industry. The link between alcohol restrictions and Covid-19 has been inconsequential, according to the available data,” said Neo Momodu, executive of legal, regulatory and sustainability at CGCSA, which has 9,000 members across the retail chain.
The research found that nearly 3,000 jobs have been lost in the more than 1,400 independently owned liquor stores that together employ over 14,000 people. Sales losses amounted to R8.5bn.
Though the government eased liquor restrictions in July, the sale of alcohol for off-site consumption is only permitted between Monday and Thursday.
The report conducted by independent research company Ipsos also found that at least 67% of those interviewed predicted business closure should the restrictions continue, with 35% at risk of closing in less than three months and another 25% in six months or more, which implies further job losses.
According to the study, liquor retailers have been losing about 50% of revenue they would have earned from Thursday to Saturday, yet overhead costs have remained unchanged. The revenue losses for small liquor outlets were as high as 65% of weekly turnover between Friday and Sunday.
In addition to cutting staff and costs, retailers have been negotiating with landlords to reduce rentals, which in turn has affected the revenue of commercial property owners.
The industry body said the restrictions have unleashed a flourishing illicit market as people have found ways to access alcohol.
The government said on Tuesday that President Cyril Ramaphosa would soon address the nation, after his meeting with the national coronavirus command council to map out the way forward.
“The economic impact of the restrictions has been dramatic and devastating on the SMME businesses with the resultant severe impact on their employees and families,” said the Liquor Traders Association of SA, which participated in the commissioning of the report.
Update: September 9 2021
This article has been updated with additional information.
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