Alcohol industry says ban poses risk to trade partnership

©Pavel Isupov via 123RF

"The EU is SA’s biggest trading partner. The Economic Partnership Agreement signed between the two parties in 2016 allows for export of 110 million litres of South African wines duty-free into the EU region. In return, the EU exports mainly spirit products into Southern Africa. This trade is now constrained due to the extended ban on alcohol sales," the alcohol industry explained in a press statement.

In a statement issued on Friday, 7 August, spiritsEurope urged SA “to cancel alcohol prohibition quickly or risk devastating consequences at home and abroad". The organisation, which represents the largest producers of spirits in the world, urged the SA government to provide a clear and reliable timeline to quickly lift the total ban on the sale of alcohol imposed as part of the response to Covid-19 outbreak.

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Ulrich Adam, director general of spiritsEurope, said, “Banning sales also means banning imports of European spirits, while South Africa continues to export particularly wine which has 110 million litres quota duty-free export into EU under the EPA – contributing to R5,7bn in net exports earnings for SA on alcohol.

"Our member companies operating in South Africa are deeply concerned about the uncertainty of current trading conditions. The lack of clarity on whether and when the ban might be lifted makes business planning impossible. We, therefore, need a clear and reliable timeline.”

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Sibani Mngadi, spokesperson for the SA alcohol industry, said it was important for the government to consider the overall effect of the ban when deciding on the next steps in response to Covid-19. “With progress being made in the health response to the pandemic, it is critical for the government to limit further the negative impact of the ban in the local economy and on our international obligations as a country,” said Mngadi.

Mngadi noted that the SA economy has already lost an estimated R13bn in direct capital investments with South African Breweries, Heineken and Consol Glass, which have all halted their capital expansion projects due to the ban.

The South African alcohol industry includes but is not limited to the National Liquor Traders Council, South African Liquor Brandowners Association (SALBA), the Beer Association of South Africa (BASA), Vinpro, the National Liquor Traders Council, and manufacturers.