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Since the first alcohol ban, the industry has been re-evaluating social programs, says Richard Rushton, CEO of Distell Group.
- A third alcohol ban would create “economic devastation,” says Richard Rushton, chief executive of the wine and spirits manufacturer Distell Group.
- Distell lost R4.3 billion in revenue for the financial year that ended in June as a result of the lockdown restrictions.
- Health Minister Zweli Mkhize specified this week that young people drinking alcohol at social events was one of the causes of the virus’ resurgence.
South Africa’s leading alcoholic beverage producers and distributors are struggling to convince the government not to impose a third ban on alcoholic beverage sales to contain the coronavirus, even as the country is experiencing a resurgence of infections.
The country’s liquor stores, supermarkets, pubs and restaurants were ordered to halt the retail sale of alcohol when Covid-19 infections began to gain traction in late March, a ban that remained in effect for more than two months. The restriction was abruptly reimposed about six weeks after it was lifted, as the initial peak of the pandemic threatened to overwhelm hospitals and emergency rooms.
The industry has taken proactive steps to withdraw support for major entertainment events during the holiday season, showing its willingness to discourage large gatherings and reduce the burden on hospitals caused by accidents. That costs the industry revenue, but is considered better than facing another shutdown.
“If we have a total ban, we all know the consequences of that,” Richard Rushton, chief executive of the wine and spirits maker Distell Group Holdings, said in an interview. “It’s going to create economic devastation, no taxes will be collected, and people will continue to gather and do it underground.”
Distell lost 100 million liters in sales volumes and R4.3 billion in revenue in the year to June as a result of the initial lockdown restrictions. The ban on the sale of alcohol has suspended investment projects worth at least 12.8 billion rand and the South African government lost billions of rand in taxes, according to data from the National Treasury.
Diluted income
Health Minister Zweli Mkhize specified this week that young people drinking alcohol at social events was one of the causes of the virus’ resurgence. Since the first shutdown, the industry has worked on reevaluating social programs, focusing on issues like drunk driving and underage drinking, Rushton said.
“The announcement that we will not support any large-scale events is one more demonstration of the intention to say, look, nobody wins from the spread of the virus,” Rushton said. “Our industry was devastated as a result of the first closures.”
