It takes some time to wrap your head around the fact that you can’t buy booze from a bottle store from Friday through to Sunday.
If I hadn’t seen a few people rushing into my local store shortly before 6PM, it would have slipped my mind. Thank you, panicked last-minute shoppers.
Retail outlets are still counting the cost of the total alcohol sales ban, and even though trading is now allowed within restricted hours (Monday to Thursday, between 10AM and 6PM), the damage is ongoing.
Writing an opinion piece on Business Day, Gareth Ackerman, the co-chair of Pick n Pay, detailed some of that damage, saying that government is “crippling retail trade”:
Where we have not always agreed with government — for example, over the ban on the sale of liquor — we have engaged in pursuit of common ground. However, the current rules on liquor are eroding confidence in government’s approach.
Retailers selling liquor for responsible consumption at home are restricted to operating from Monday to Thursday.
However, those selling liquor for on-site consumption, such as bars and taverns, can trade a full seven days. This makes no sense for a sector that accounts for only 30% of the total liquor throughput.
Ackerman says that the liquor retail industry is in “extreme distress”, and that is felt right along the supply chain, from farmers through to retail outlets.
According to a recent assessment by the South African Liquor Brandowners Association (SALBA), our three total alcohol bans cost the country’s GDP around R52 billion.
Job losses will continue, because the restrictions are not financially sustainable:
The sector is losing 50%-60% of its liquor sales volumes in the Friday-Saturday period and 10%-18% on Sundays every week.
It is pertinent to note that 60% of the liquor retailers are SMEs that rely heavily on weekend trade, and many are already retrenching because the four-day trade cannot sustain their businesses. The irony of this situation is that the fiscus is directly losing PAYE, excise duty and VAT, and there are several other revenue losses via the multiplier effect such as Unemployment Insurance Fund claims and social grant claims.
Ask people who have worked regularly in a trauma unit, and they’ll tell you that the alcohol sales ban reduced the number of patients coming through their doors.
A reduction of trauma admissions is great, as it frees up resources to be used in the battle against COVID-19, but retailers and people like Ackerman will say but at what cost?
With the current restrictions, the illicit liquor trade is booming, which means further lost tax revenue. That same problem can be seen with the trade of illicit cigarettes, which flourished during the ban on the sale of tobacco products, and continues to do so.
Ackerman goes on to say that urgent policy action is required on behalf of government, but there is little evidence that changes are being considered at this point.
Ramaphosa wrote recently that companies will need to be innovative in driving methods and processes that secure sustainability and profitability, while ensuring job retention and creation. We agree with him.
But it will not happen as long as the government ignores rational advice from the business sector and pays only lip service to its commitment to implement policies that help in reviving and restoring economic growth.
Who knows what comes next, but we will be left with a serious economic hangover when (if) we finally get COVID-19 under control.
You can read Ackerman’s full opinion piece here.
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