Consumer Goods Council of South Africa Criticises Government Decision to Ban Liquor Sales

The Consumer Goods Council of South Africa (CGCSA) says it is concerned with the decision by the government to ban liquor sales for two weeks despite numerous appeals to consider alternative measures to protect both businesses and jobs. CGCSA says the latest ban has come at a time when the liquor retail sector was beginning to recover lost sales and income from the cumulative impact of restrictions on alcohol sales which have been imposed since March 2020.

In recognition of the need to contain the spread of Covid-19, particularly in Gauteng, the CGCSA recommended that government allows for the sale of liquor for off-site consumption for all liquor traders, including limiting gatherings and imposing stricter curfew hours. We understand and support measures to protect lives and livelihoods, but this has to be balanced with also protecting jobs and businesses. Many businesses are struggling to survive due to lockdown restrictions imposed on the sale of liquor since the first lockdown was announced in March 2020. Of particular concern is the absence of relief measures to the sector which is still expected to pay for fixed costs such as rentals, electricity and staff wages.

The impact on the SMMEs and employees operating in the sector will be particularly devastating. Of the 3 281 affected retail liquor outlets, approximately 15% are black-owned and 16 400 of directly affected employees are black females. On average five employees excluding service providers employees (merchandisers, security workers, cleaners) per outlet are at real risk of losing jobs with devastating consequences. The loss of income is colossal and many may never recover from such restrictions, more so when considering that they are still to restore their viability levels which have been affected by previous lockdown restrictions on the sale of liquor.

To put this in perspective, aggregate loss in sales since the inception of lock down stands at approximately R8.5 billion. The latest ban will further delay the recovery of the retail sector and there are also the unintended consequences of the restriction where people will, as with previous restrictions, resort to the illicit alcohol market costing the fiscus, which has already lost more than R6.4 billion in lost tax revenue.

CGCSA and other key stakeholders in the liquor value chain have continuously raised the challenges brought about by the on and off restrictions on the sale of liquor at platforms such as Nedlac including direct communication to the government but to date, we have not received any constructive feedback on how we can work together to minimise the impact of the devasting restrictions.

Government has chosen to take a unilateral approach to making decisions on key decisions without proper consultation of the sector. We argue that the top down approach is unsustainable and fails to take into account the need for a united front to address the economic and health challenges facing our country.

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