SA Breweries cancels billions more in investment due to alcohol ban

The three alcohol bans instituted by the government since the start of the coronavirus pandemic have already cost the fiscus about R4.5 billion in lost income from SA Breweries alone.
The three alcohol bans instituted by the government since the start of the coronavirus pandemic have already cost the fiscus about R4.5 billion in lost income from SA Breweries alone.

South African Breweries (SAB) has cancelled a further R2.5 billion of capital investment following the third blanket ban on alcohol sales, it announced on Friday.

In announcing the ban, President Cyril Ramaphosa said excessive alcohol consumption was contributing to the increased number of trauma cases in hospitals. 

The cancelled investments for 2021 relate to upgrades to operating facilities, product innovation, operating systems, as well as the installation of new equipment at selected plants. 

This brings the brewer's cancelled capital expenditure in SA since alcohol sales bans were introduced in 2020 to a total of R5 billion. At the height of the second ban on the sale of alcohol in August 2020, SAB announced the cancellation of R2.5 billion worth of South African investments for its annual capital and infrastructure upgrade programmes.

SAB intends to bring an urgent application in the Western Cape High Court to challenge government's latest blanket alcohol ban as a last resort. Government has not yet indicated whether it will oppose the application.

According to SAB, the alcohol industry continues to support over one million livelihoods throughout its value chain, across farming, retail, manufacturing, logistics and many SMMEs whose incomes are at stake due to the suspension of alcohol trading.

The three alcohol bans instituted by the government since the start of the coronavirus pandemic have already cost the fiscus about R4.5 billion in lost income from SA Breweries alone, the beer giant claimed in court documents.

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