In a move seen as a pre-emptive bid to prevent another ban on liquor sales, an association representing big beer manufacturers in the country, including SAB and Heineken, has approached the courts to have previous prohibitions on alcohol sales declared irrational, invalid and set aside.
Alcohol industry players fear that the government may impose another liquor sales ban over the busy festive season period as Covid-19 infections driven by the Omicron variant rise.
The Beer Association of SA (Basa) said in court papers filed at the high court in Pretoria in November that the government’s failure to provide evidence to support its decisions to enforce the previous bans, means it failed to take into account the devastating impact of the bans on the alcohol industry “and for this reason, among others, these decisions are reviewable and destined to be set aside in terms of the Promotion of Administrative Justice Act”.
The act seeks to give effect to the right to administrative action that is lawful, reasonable and procedurally fair and to the right to written reasons for administrative action as highlighted in the constitution.
SA has been in a state of disaster since March 2020, affording the national government authority to write regulations about school closures, retail sales and alcohol bans, as well as to enact curfews in response to the pandemic.
Basa points out that the previous alcohol bans had a devastating effect on the alcohol industry, with about 15% of projected sales volumes for 2020/2021 being lost. In total R42.2bn was lost in retail sales and there was a R60.7bn loss to GDP. The total excise income tax loss was R10.2bn with just more than 233,000 jobs being put at risk.
Basa said by mid-January 2021, 30% of local breweries were forced to shut their doors permanently and 165,000 people had already lost their jobs.
“The bans also served as a major boost to the illicit alcohol industry which grew to be worth more than R20.5bn in 2020,” said Basa CEO Patricia Pillay.
“Another alcohol ban over the coming festive season, a time when we expect some recovery for the tourism and hospitality sector, will serve as the final nail in the coffin for thousands of businesses/citizens who just barely survived the previous bans,” she said.
The court papers list President Cyril Ramaphosa as first respondent, with the co-operative governance minister Nkosazana Dlamini-Zuma as well as her health counterpart Joe Phaahla cited as the second and third respondents respectively.
SAB has also previously launched a court bid to have an alcohol ban lifted. It argued, among other things, that Dlamini-Zuma’s power under the Disaster Management Act did not include the power to “override or repeal existing legislation”. It also argued that the fourth ban on alcohol sales — the most recent — in 18 months was unsubstantiated by robust scientific evidence — and that the minister’s decision to promulgate the regulations was procedurally unfair or procedurally irrational because she did not consult them and other key stakeholders in the industry.
In July the high court in Cape Town dismissed SAB’s application with costs saying that given the speed with which the government was required to act, given the high transmissibility of the Covid-19 Delta variant, it could not be argued that Dlamini-Zuma acted in an unfair or unprocedural manner.
Vinpro, the organisation representing wine farms and producers, also recently approached the courts arguing that provinces, specifically the Western Cape, should decide on liquor bans in the pandemic as the constitution and Liquor Act grant them authority over liquor licences that specify who can sell alcohol.
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