Alcohol industry records R36bn loss due to liquor bans 

People working in the restaurant, food and alcohol industry take part in a nationwide protest against provisions in South African government Lockdown legislation, which threatens the survival of the businesses and jobs, in Cape Town city centre, on July 22, 2020. The reintroduction on the ban on alcohol sales and a night curfew by the South African government will have a negative economic impact on the hospitality industry. (Photo by RODGER BOSCH / AFP)

The country’s GDP loss was approximately R51.9 billion, about 1.0% of the total GDP measured at market prices due to the three bans.

Figures released by the alcohol industry show that there was a cumulative loss of R36.3 billion in the revenue value chain in the informal and formal economy as a result of the three alcohol bans.

It said that a further 200,200 jobs remain at risk.

These findings were released jointly by the South African Liquor Brand owners Association (SALBA), the Beer Association of South Africa (BASA), Vinpro and the National Liquor Traders Council (NLTC.)

They said that the impact of the three alcohol bans in 2020, including the five-week ban between 29 December 2020 to 2 February 2021, resulted in damaging financial implications.

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SALBA CEO Kurt Moore said that not only is the industry and its people suffering, but that government itself was experiencing considerable losses to the fiscus.

“According to the assessment, the tax revenue loss (excluding excise) to the fiscus from the value chain arising from the bans amounted to R29.3 billion (equivalent to 2.3% of tax revenue), and direct excise tax revenue lost across the nation was R8.7 billion (equivalent to 21.2% of excise revenue),” said Moore.

He said the country’s GDP loss was approximately R51.9 billion, about 1.0% of the total GDP measured at market prices due to the three bans.

“If you factored in the loss of potential total capital formation, some R21.7 billion (equivalent to 0.3% of national capital formation, or fixed capital investment in 2019)—then the prohibition measures could only be viewed as a national socio-economic disaster,” he said.

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Lucky Ntimane of the NLTC said that the impact of the bans has been devastating to the tavern industry and the entire alcohol value chain.

“The country cannot survive such losses. The government should find viable and better alternatives, and the sector has continually sought ways of collaborating with the government to re-examine better alternatives to prohibition,” said Ntimane.

Compiled by Siyanda Ndlovu

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