Alcohol industry estimates R36bn revenue losses, says 200 000 jobs at risk due to liquor bans

play article
Subscribers can listen to this article
South Africa's formal and informal drinking establishments were banned from selling alcohol for 19 weeks.
South Africa's formal and informal drinking establishments were banned from selling alcohol for 19 weeks.
iStock/Gallo Images

South Africa’s alcohol industry is estimated to have lost R36.3 billion in retail sales revenues in the on again off liquor bans between 2020, when the lockdown began, and when the latest one ended this month, according to a report. 

It is also estimated that the loss of sales has put more than 200 000 jobs at risk across the formal and informal sectors. 

The bans, which began with the hard lockdown last year, have been a source of contention for consumers, producers and traders. Government has justified its decision to halt alcohol sales as a means to prevent an influx of trauma cases at hospitals and to have beds available for Covid-19 patients.

Dry throats were a big issue for consumers, while the industry lamented revenue and job losses. In an alcohol industry commissioned report, seen by Fin24, advisory firm FTI Consulting calculated the cost of the 19 weeks of the bans. The impact of this, together with an additional five-week export prohibition, is estimated to have cost the industry about 30% of sales opportunities and 1.1 billion litres in sales volumes in 2020 and 2021 thus far.

The overall alcohol sales volumes declined by almost 17%, compared to 2019. The beer sector was the hardest hit, with its sales declining by 195 million litres, ready-to-drink beverage sales dropping by 38.1 million litres, wine sales by 27.2 million litres and spirit sales 10 million litres.

FTI said the performance was also driven by consumers moving to more affordable alcohol brands as their incomes declined. The biggest impact on the beer and ready-to-drink sectors came from curfews and on premises restrictions. Consumers rushing to stockpile on beverages with a longer shelf life like spirits and wines, and post-ban stockouts, also played a role.

The industry employs 415 000 people, and the report estimates that 200 200 jobs could be lost in both the formal and informal sectors.

The state will also be one of the bans biggest losers, with an estimated R29.3 billion tax revenue loss (excluding excise) and a R8.7 billion direct excise revenue loss.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Yes, and I've gotten it.
21% - 1240 votes
No, I did not.
52% - 3099 votes
My landlord refused
28% - 1671 votes