SAB supports 355 000 jobs – study

2010-10-14 11:16

South African Breweries (SAB) supported 355 000 jobs last year, a study released today showed.

The study – undertaken by independent economics group Econex – said the company had a workforce of 9 390 and sales revenue of R32.7 billion.

However, when the economic multiplier effects of SAB’s operations were taken into consideration, SAB and its value chain supported more than 355 000 jobs throughout South Africa and generated R27.6 billion in labour income during last year.

“Despite the trying economic times and dramatic job losses seen throughout the South African economy, SAB did not succumb to the pressure to cut costs by retrenching workers,” the survey found.

According to the March 2010 Quarterly Employment Statistics report from Statistics SA, total employment in the formal non-agricultural sector declined by 4.1% between December 2008 and December last year, while 7.1% of the jobs in the manufacturing sector were destroyed over the same period.

“In sharp contrast, SAB increased its labour force by 2.7%, creating employment opportunities for another 250 workers during 2009,” the survey said.

Remuneration of SAB workers was found to be above average.

“Whereas the average monthly wage in the manufacturing sector came in at R9 178 during last year, the average SAB employee earned R23 307 per month during the same year.”

More than three-quarters of SAB’s employees were from previously disadvantaged race groups, and 58% of its workers were black.

“Even at the highly skilled level, workers from previously disadvantaged backgrounds account for almost half of SAB’s employees.”

The study found that SAB contributed R66.2 billion, or 3.1%, to South Africa’s gross domestic product (GDP).

“Some 46%, or R43.5 billion, of the GDP generated by the liquor industry can be traced back to the economic impact of SAB’s beer division.”

According to the study, the company’s GDP multiplier was estimated to be 2.02, indicating that for every R1 in sales revenue generated by SAB (i.e. turnover at company level), R2.02 was added to the country’s gross domestic product.

The study also showed that during the 2009/10 fiscal year, the treasury received R10.2 billion in tax revenue directly from SAB, its employees and consumers of its beverages.

“To put this in context, this would be more than enough to finance both the government’s planned Comubia housing development and the N2 Gateway project; or enough to finance the construction of the Soccer City (now FNB) stadium, the Greenpoint Stadium, Durban’s Moses Mabhida Stadium and the Peter Mokaba Stadium in Nelspruit; or close on the total amount that government has spent since 1992 on electrifying 4.9 million households, 5 000 schools and all health clinics in South Africa.”

The largest proportion of tax raised from SAB (53%) came from specific excise tax – with R5.4 billion being raised from SAB’s products in excise duties alone, more than a quarter of all excise tax paid in South Africa.

The study found that when the government income generated by all the multiplier effects of SAB’s operations throughout the economy were also taken into consideration, the tax revenue added by SAB and its upstream and downstream partners increased to R28.1 billion, or 4.5% of government’s total tax haul during last year.

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