Alcohol industry heavyweights Diageo, makers of Johnnie Walker and Smirnoff, pledge a R25 million relief fund to get their partners trading again – fast
The looting and infrastructure destruction that took place in July is estimated to have cost the alcohol industry R1,4billion. However, Zizwe Vundla, the Marketing and Innovations Director at Diageo, says by far the highest cost is human.
“The economic impact is horrible, but it is also that the spirits of those business owners were broken. One businessman was the third generation of his family to work in their 100-year-old store – it was burned to the ground. The economic impact is huge, but the mental impact will be big too.”
As part of their response to the emergency, Diageo has pledged a R25million relief fund. “It is easy to say you are a partner, but we showed we are a partner by getting into the communities to help with the cleanup.” Now that the cleanup phase is concluding, Vundla’s teams will be focusing on what is most important next. “The biggest thing we can do is to get those businesses trading again as fast as possible.”
This is important as so many tavern owners don’t have insurance – or the resources to rebuild without significant help. Many of these businesses – 60% of which are women-owned – have grown organically from one person selling a quart or two into thriving community businesses. These women are also breadwinners and, so far, the actual number of these businesses affected has yet to be quantified. However, to get a sense of the scale of the destruction 260 grocer outlets were looted and/or destroyed.
Vundla surprisingly discloses that despite the lockdowns it has been an extraordinary time to be in the alcohol business. She adds that what she and her team have had to learn on the job is unquantifiable. “You can’t learn what we had to learn in the last 18 months in business school. When you can’t trade for months it’s tough – from staying motivated to keeping customers engaged. It goes way beyond the bottom line.” However, she says that having people who love their brands – which include their flagship products Johnnie Walker and Smirnoff – has helped. Smirnoff is so popular in South Africa, and primarily in KwaZulu-Natal, that this country is in the top three global markets for the brand.
The relief fund will prioritise getting these community businesses back on their feet by not only helping with rebuilding and repairs, but by giving them a stock injection so that the businesses have something to trade, as well as giving them cash so that they are able to pay staff and suppliers, and offering payment reprieves to enable them to get back on track faster.
Vundla emphasises the most important thing for her and her team is for them to make a difference, to have a positive impact on helping the South African economy heal. She says the knock-on effects of the alcohol bans, and now the civil unrest, are not only about the bottom line. It is also about the taxes the industry contributes to the fiscus, as well as all the jobs down the value chain – from those who make the glass for bottling, to the factory that makes the base spirit for their products, to the restaurants that employ staff and those who work to deliver the product to traders.
This commitment is in addition to the support that Diageo SA provided to the industry last year, through partnerships with the Restaurant Association of South Africa and the Consumer Goods Council of South Africa which saw more than 400 establishments in Johannesburg, Cape Town, and Durban assisted with R200-million support to cushion them from the blow of COVID-19 lockdown and the alcohol restrictions.
As we all continue to count the cost while rolling up our sleeves to help, Vundla concludes: “Making a difference is what is important to me. It is the human element that matters – it is important to remember the people who are affected, the people who are at the centre of this crisis.”