- SAB has committed R2 billion to capital investments in SA.
- Although SAB has taken on government about previous bans on the sale of alcohol, it believes no further sales bans will be imposed.
- It argued for finding sustainable solutions to boost the economy.
South African Breweries (SAB) has committed R2 billion to capital investments in South Africa, saying it believes the government will no longer impose alcohol bans.
The money will be use to upgrade its operating facilities and invested in new equipment.
The country has been in a Covid-19 lockdown for more than a year, and during that time, the government has imposed and lifted a series of bans on the sale of alcohol. Its rationale for the bans was that hospital beds had to be clear of alcohol-related trauma cases to ensure that Covid-19 patients access to beds.
The industry warned of the financial repercussions of the ban, saying billions in revenue and more than 200 000 jobs were at stake. As a result of the second and third bans, SAB cancelled capital investment worth R5 billion last year, with fellow beermaker Heineken following with a R6 billion cancellation. Heineken confirmed recently that it is now in talks about a possible takeover of Distell.
SAB is challenging the lawfulness of the alcohol sales bans in courts, saying that it has lost R4.5 billion in income, and objected to government's lack of consultation about the bans.
However, it seems as though the AB InBev-owned company and the government have smoothed their relationship, following engagements through the National Economic Development and Labour Council (Nedlac) and the National Joint Operational and Intelligence Structure (Natjoints).
In a show of confidence, SAB announced this week that it would invest R2 billion across its South African operations on capital expenditure - such as upgrading its operating facilities - as well as new equipment, which will be completed in the 2022 financial year.
"The recent engagements with government, we believe, are a signal that we can expect to see more consultation in the future and that blanket bans will be a thing of the past," said Richard Rivett-Carnac, SAB’s vice-president for finance and legal.
SAB said the R2 billion was a new allocation, since the R5 billion in capital expenditure was cancelled in 2020. In response to the kind of action the beermaker would take if the government imposed another ban, SAB said collaboration was the key to finding sustainable solutions that saved both lives and livelihoods, as well as boosting the economy.