Lockdown bans on alcohol cost the South African economy R52 billion, according to an alcohol industry report.
The report assessed the economic impact of the three alcohol bans in 2020, as well as the five-week ban from the end of 2020 to the beginning of 2021, according to Businesstech.
It cites chief executive of the South African Liquor Brand Owners Association Kurt Moore as saying that both the liquor industry and government were negatively impacted, with the former losing out on sales and the latter losing valuable tax revenue.
Tax revenue loss (excluding excise) from the value chain due to the bans totalled R29.3 billion, or 2.3% of tax revenue, the report says. R8.7 billion in direct excise tax revenue was lost across the country, or 21.2% of excise revenue.
Moore estimates the cost to Gross Domestic Product (GDP) at R51.9 billion.
Says Moore: ‘If you factored in the loss of potential total capital formation – some R21.7 billion – then the prohibition measures could only be viewed as a national socio-economic disaster.’
According to the Businesstech article, chief executive of the Beer Association of South Africa Patricia Pillay said that the financial cost to the industry was considerable and impacted on the lives and livelihoods of many workers.
She is quoted as saying: ‘The sales volumes of around 1.1 billion litres lost during this period may result in a loss of more than R36.3 billion in sales revenue – the equivalent of 24.8% of total sales value for 2020 and projected sales value for 2021.
‘The beer industry alone lost approximately R18 billion in sales throughout the three bans.’
She estimated that more than 200 000 jobs, equivalent to 1.22% of national jobs in the informal and formal sectors, were under threat due to the bans.
Pillay urged the government to ‘consider viable alternative measures that address alcohol misuse while maintaining the livelihoods of a significant number of people whose jobs and access to income are dependent on the industry’.
[Image: Adam Wilson on Unsplash]