Citizen Reporter
Reporter
3 minute read
25 Jan 2021
3:14 pm

SAB storage almost at capacity, brewers flatlining as liquor ban drags on

Citizen Reporter

SAB will have to continue reducing production levels, which could lead to more retrenchments, and 30% of local breweries have been forced to shut down permanently.

The owner of Mad Giant Brewery, Eben Uys, checks the temperature of beer tanks in his factory, in Newtown, Johannesburg, on 15 January 2021. Craft breweries in South Africa had to adjust their operations to survive the third alcohol ban imposed by the government to help curb the spread of Covid-19. Mad Giant Brewery has reconverted part of his staff to the production of hydro-alcoholic gel. During the first wave of the pandemic, this new activity kept him afloat. But this time it's a bit harder. Picture: Luca Sola/AFP

From obscure craft breweries to established international brands, the alcohol industry continues to be crushed by the weight of the continued, reinstated ban on alcoholic beverages. 

South African Breweries (SAB) reported on Sunday that its maximum storage capacity was fast being reached at its nine brewing facilities. 

This means that SAB will have to continue reducing production levels, which could lead to more retrenchments. 

SAB retrenchments

The immediate effect is already being felt, with 550 temporary contract workers recently let go across the country. 

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“The third alcohol ban has resulted in a reduced demand for the temporary workers skills, this is no fault of their own but rather a result of the current operating environment. 

“We realise the impact this decision will have on the 550 families who will sadly have to go without because of the reduction of production levels due to the suspension of sales,” SAB corporate affairs vice-president Zoleka Lisa said.

Lack of engagement from government and no timelines on the ban have exacerbated the already dismal situation, however. 

But Lisa said the sector would continue to push for “collaborative solutions for a better sustainable future”.

Along with the recent retrenchments, SAB has already cut overall staff salaries by 10%. The company has also been forced to cancel R5 billion worth of investments.

“We respectfully ask government to engage with the industry and all social partners in an attempt to achieve greater responsibility in decision making as we continue to navigate the pandemic. 

“SAB remains committed to supporting the nation’s fight and we are determined to play our part in ensuring that we continue to contribute positively to our country’s economic recovery and stability. But we strongly believe that a more balanced approach would be better in the long run,” Lisa said.

Craft brewers at their wits’ end

A survey conducted by the Craft Brewers Association of South Africa (CBASA) has found that seven out of eight craft breweries do not feel they will survive the third ban on alcohol.

30% of local breweries have been forced to shut down permanently.

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60.3% of small business owners have had to retrench staff, leading to further job losses within the industry. Overall, at least 165,000 people in the craft sector are now unemployed due to the ban and the Covid-19 pandemic.

41.3% of craft brewers said that stock they prepared for the festive season will soon expire in storage, and will have to be destroyed.

And 77.8% of craft brewers are not currently able to pay their rent, supplies or employees.

The Beer Association of South Africa (Basa) and CBASA said they have had to start issuing food vouchers to employees that still had jobs within the craft brewing industry. 

But despite the damning statistics, Basa said they felt the “plight of craft-brewers has fallen on deaf ears”.

Basa has since written to the Presidency and the Department of Trade, Industry and Competition. 

They have suggested lifting the ban on off-site consumption to allow people to enjoy alcohol in their own homes. Basa members have also launched click-and-collect platforms where alcohol orders can be placed online and collected or delivered. 

“The situation is indeed dire. We need to know when the ban will be lifted, and we need the assurance that – at the every least – the ban on off-site consumption will be lifted soon,” Basa said. 

Compiled by Nica Richards

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