- Government recently announced a third blanket ban on alcohol trade as part of an attempt to address the second wave of coronavirus infections.
- President Cyril Ramphosa admits this could have consequences for his investment drive.
- He wants to speak to South African Breweries, which has already cancelled billions of investments due to the ban.
President Cyril Ramaphosa says he is "obviously concerned" about the effect the alcohol ban could have on his investment drive.
South African Breweries (SAB) announced on Friday that it has cancelled a further R2.5 billion of capital investment following the third blanket ban on alcohol sales. This brings the brewer's cancelled capital expenditure in SA since alcohol sales bans were introduced in 2020 to a total of R5 billion.
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 was least expected. What we have sought to do is to save lives in our country and also balance livelihoods and protect those livelihoods. I'm hoping that we will be able to have a discussion with South African Breweries and discuss this matter," Ramaphosa told the political editor Qaanitah Hunter and senior political reporter Carien du Plessis of Fin24's sister site News24 on Friday.
"South African Breweries is an important corporate in our country, has been so for more than a 100 years. And obviously we are concerned that they have taken this type of decision."
Running out of space
Ramaphosa explained that, when government took the decision in the first instance to ban alcohol, it was because of the impact that alcohol has on the congestion in SA's hospitals.
"We have seen how the ban on alcohol for a period has actually resulted in terms of opening up spaces in our hospitals. As it is now, the spaces and beds in our hospitals are running out, and some hospitals have reported that they have run out of hospital space," said Ramaphosa.
"And utilisation of hospital beds by people who come in from trauma like accidents, alcohol induced stabbings and so on have been taking hospital beds that are much needed for dealing with Covid-19. So we have tried to balance."
He pointed out that this is an alcohol ban that will not go on forever.
"It's an immediate-term measure to deal with the pandemic. It's not even short or medium-term. It's an immediate term. So, alcohol will be opened again in terms of sales and production. So, we are not dealing with a situation that is permanent, but we will be in discussions with them on this matter."
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.
* With Qaanitah Hunter and Carien du Plessis.