The alcohol industry, which supports one-million jobs and contributes 3% to SA's GDP, says it cannot sustain the ban on its ability to trade anymore and that large-scale retrenchments will become inevitable.
"With no/minimal revenue for eight weeks and no certainty of the future, the industry cannot sustain the ban any further and job cuts are a harsh reality," the liquor industry said in a statement late on Friday. "We hope the gravity of the current situation is taken into serious consideration by decision makers, as the livelihoods of many people rest in their hands."
It said the eight-week ban, including the period when it wasn't able to export, had so far led to a loss of about 118,000 jobs and boosted illicit trade that was already costing the country almost R13bn, resulting in a R6.4bn loss for the fiscus. Price extortion in the underground market has seen prices double or triple, meaning poorer households were diverting a greater portion of their scarce income to alcohol, they said.
"A legal alcohol industry is more economically efficient force against illicit activities compared to investing and diverting valuable state resources in enforcement to fight illicit trade."
The intervention by the grouping, which is an association of companies and trade bodies, and whose members include Vinpro, which represents local wine producers, ABInBev, the world's biggest beer brewer, and Heineken, the biggest in Europe, comes as the government's policy on the sale of tobacco and alcohol is once again mired in controversy.
News24 reported on Friday that co-operative governance minister Nkosazana Dlamini-Zuma had argued for a continued ban on tobacco and alcohol products until the country had moved into level 1 of the lockdown, when most of the economy will be reopened, citing an unnamed source at the National Coronavirus Command Council (NCCC), the body set up by government to co-ordinate its response to the Covid-19 outbreak.
The country is currently on level 4 and president Cyril Ramaphosa said in a briefing last week that it would move one step lower by the end of May. The sale of alcohol hasn't been allowed since March 27, threatening industries across the supply chain from farmers to glass producers, who warned they might have to close factories.
Even with an immediate move to level 2, SA's GDP would contract more than 10% in 2020, according to Business for SA. The Reserve Bank this week cut its GDP forecast for 2020 to -7%, warning of more job losses. Even before the current crisis, SA was struggling with an unemployment rate of 30%, making it one of the most unequal societies in the world.
The industry called on government to allow the manufacturing, distribution and trade of alcohol as the country moves to level 3, and pledged to take steps to ensure health regulations were adhered to. It proposed a "click-and-collect" model to limit queueing. The group also offered to use its distribution networks to supply personal protective equipment to remote clinics and and deliver other goods such as educational material.
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