Cape Town - While the alcohol ban has resulted in billions of revenue lost for the alcohol industry, it has created a platform for the unemployed in informal settlements to feed their families.
An anonymous illicit alcohol trader from Gugulethu explained that for many young people living in townships, the alcohol ban creates a booming business, and most importantly, an opportunity for them to feed their families.
“Many of our parents and family members have lost their jobs. We are desperate to find a means to generate an income, and this is easy because alcohol will always be in demand. The alcohol ban creates a situation where there is an increase in the demand for alcohol and a lack of supply which means I can sell alcohol at a very high price.”
He stated that he is able to generate roughly R15 000 from alcohol sales during bans.
A 23-year-old student also described the business as lucrative, making it appealing for anyone without a salary. He said stocking up a batch in bulk can cost as little as R500, but over several weeks, it can net you close to R10 000, if not more.
“You cannot put law and regulations over a hungry stomach because sadly that will not feed you or your family. We need money to eat and live. A five-week alcohol ban enabled me to cover my bills for three months.”
A research report entitled, Illicit Trade: Alcoholic Drinks in South Africa in 2020, was jointly commissioned by the South African Liquor Brand Owners Association (Salba), the Beer Association of South Africa (BASA) and Vinpro. The report indicated that the illicit alcohol trade has grown at a compound annual growth rate of 17% since 2017 and now stands at 12% of the R177.2 billion total industry market value.
Chief executive of Salba Kurt Moore explained that the report confirmed a clear correlation between the alcohol sales bans and the increase in the demand for illicit alcohol.
“The illicit trade market has almost doubled in the last three years and, in 2020, is now estimated to be worth R20.5bn, and comprises 22% of total alcohol consumption. The tragic indirect consequence of this has been the rise in illicit home-brew consumption-related deaths and an increase in criminal activities, which are now firmly entrenched.”
Last year, Sars lost R11.3bn due to the illicit alcohol trade. Moore pointed out that this was enough to pay for more than two million child support grants for a year or put an additional 34 000 police on the streets.
“The alcohol ban has put 200 200 jobs supported by the alcohol value chain at risk in the nation's informal and formal economy.”
The report, that was released in February, indicated that sales revenue lost as a result of the bans is approximately R36.3bn. Furthermore, the country's GDP loss due to the bans is approximately R51.9bn, and tax revenue loss (excluding excise) to the fiscus from the value chain arising from the bans amounts to R29.3bn.
Moore emphasised that alcohol prohibition is extensive and has a knock-on effect on several industries, this includes: agriculture, manufacturing, distribution, packaging, warehousing, retail, hospitality and tourism, as well as smaller craft brewers, distillers and wine farmers.
Chief executive of the Beer Association of South Africa, Patricia Pillay, said that the current blanket ban on alcohol will deliver a severe blow to thousands of small businesses still trying to get back on their feet from the previous bans, resulting in even more job losses, business closures and loss in revenue for the national fiscus.
“The Craft Brewer’s Association of South Africa also reported the potential closure of over 70% of local craft breweries following the third blanket ban on alcohol which ended in February this year.
Without any government funding or aid, job losses in the beer industry will likely be an unfortunate reality that we have to confront and accept. This will be a direct result of the government's decision to institute a fourth blanket ban on alcohol in 15 months, resulting in over four months of restricted trade.”
Weekend Argus