Liquor ban: SAB abandons R5 billion in investments due to lockdown

Liquor ban: SAB abandons R5 billion in investments due to lockdown

- SAB has announced that it has abandoned R5 billion worth of investments in South Africa

- The nation's biggest beer producer says that the current ban is directly responsible for the change in direction

- This comes as the industry records immense job losses with production essentially grinding to a halt

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South African Breweries, the nation's largest beer producer, has announced that it abandoned R5 billion worth of investment projects in SA.

This comes after the government imposed a complete ban on alcohol sales due to the Covid-19 pandemic, not once, but twice.

SAB finance vice-president Andrew Murray revealed that R2.5 billion in investment for this year with an additional R2.5 billion under review for 2021:

“The cancellation of this planned expenditure is a direct consequence of having lost 12 full trading weeks, which effectively equates to some 30% of the SAB’s annual production."

Another industry giant, Distell, says that the industry has lost over 100 000 jobs with another 84 000 potentially on the line due to the ban.

The amount of taxes lost during the initial ban amounts to R15.4 billion with another R13 billion at risk if the prohibition continues.

coronavirus
SAB blamed the current grim situation on the lockdown liquor ban. Image: Getty Images
Source: Getty Images

READ ALSO: Lift tobacco, liquor ban 'yesterday': DA wants Ramaphosa to act

Distell executive Richard Rushdon says that nearly 800 smaller manufacturers are facing bankruptcy in a statement released by the group. The glass container industry spent R8 million on a daily basis to keep furnaces running but lost 82% of its business due to the ban.

SAB's Murray says that the group's decision to cancel investment will have a ripple effect on the companies that had been selected for opportunities. The executive insists that the impact of the suspension of liquor sales will continue to weigh on citizens:

“The jobs and financial losses magnify considerably when considering the severe impact the suspension is having on communities, as well as the downstream supply chain, including, farmers and other raw material suppliers, tavern owners, packaging and logistics companies, among many others that have had to immediately stop operations, and are facing dire consequences."

Meanwhile, Briefly.co.za reported that the Democratic Alliance has welcomed comments put forward by SA Medical Research Council over the current alcohol ban.

The opposition party has called for an immediate end to both the prohibition on liquor and tobacco products.

Dr Glenda Gray has urged the government to consider a more 'nimble' approach than a total ban and to 'look at livelihoods' that have been affected by the restrictions. Gray noted that the expected pressure on hospitals was what was expected when the second ban was implemented.

The DA pointed out that the state has defended its position as 'led by science' and insists that instead, the government has done the opposite:

"From allowing taxis to load up to 100% to closing down schools, science has been the very last thing the government has worried about. However, what they have obsessed about it capitulating to powerful unions, lobby groups and internal ANC factional forces."

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Source: Briefly.co.za

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