Booze industry loses and learns: sobering lessons from the ban
We now know a thing or two about the damage alcohol restrictions can cause, so where to from here?
It has been almost 18 months since we were thrust into the initial hard lockdown. The impact of this indefinite lockdown, and the four alcohol bans that came with it, have been tough. This is true not only for our SAB family, but for the industry and the broader value chain at large, which supports more than a million livelihoods.
As we (re)start the long journey to economic recovery for our sector and country, marred by unrest and looting on a never-before-seen scale, the affirmation that lives and livelihoods matter in the country’s Covid-19 response rings truer than ever.
While parts of the global population are now emerging from the pandemic vaccinated and ready to work, our vaccination rollout programme is moving at a slow pace. Now we have to live in fear of yet another wave, which will result in more job losses.
Over the course of 22 weeks of prohibited alcohol sales, all packed into four alcohol bans, the lessons we have learned need to be thoroughly unpacked if we are ever going to understand the unintended consequences of prohibition. From more than 233,000 jobs being put at risk, to R10.2bn being lost in excise tax, from R60.7bn GDP loss to R11.3bn fiscal loss, to an entrenched illicit alcohol trade – one can’t help but reflect on what each ban has taught us.
Banning alcohol sales does not remove demand. Instead it places the market into the hands of criminals, increasing illicit trade in alcohol.
Lesson 1 – ‘With immediate effect’ is just plain irresponsible
Considering more than a million livelihoods are put on the chopping block whenever a ban is instituted, it shows an incredible disregard for the people who need this industry to put food on their families’ tables. Doesn’t the National Command Council (NCC) realise the process of making beer extends from barley farming to bar? There are so many parts of our extensive value chain working carefully in unison to deliver some of SA’s most loved beers.
A forewarning is something we have been calling for from the beginning.
Lesson 2 – We need more evidence-based decision-making
The industry has consistently outlined our legitimate concerns around the science behind the implementation of alcohol bans. To date we still have not been provided the opportunity to engage with the data used to support these findings. At no stage during the past 18 months has government shared the science that justifies its decisions.
In a world of misinformation, scientific advice should be applied to every aspect of society so individuals can make informed decisions based on the best evidence available at the time. Our world should be ruled by facts rather than myth.
Lesson 3 – Prohibition criminality
Banning alcohol sales does not remove demand. Instead it places the market into the hands of criminals, increasing illicit trade in alcohol. Illicit trades in more than R13bn a year and results in annual tax losses in excess of R6bn. The ban has offered criminals an unparalleled opportunity to grow their illicit foothold on the market.
Prohibition diverts law enforcement resources during this indefinite lockdown. The simple fact is that telling someone they cannot have something only makes them want it even more. But at what cost?
Lesson 4 – Be part of the solution
. SAB has proactively produced a comprehensive plan that addresses the challenges of combating the spread of the virus while ensuring responsible alcohol consumption.
Government must focus on increased enforcement and visibility, as seen in lockdown level 5 and 4, coupled with transparency through meaningful engagement.
So where to from here?
The regulatory position taken towards alcohol in SA has definitely been at the extreme end of the spectrum compared with lockdown measures put in place by other countries on the continent and globally.
In some countries where bans were instituted, the governments quickly reversed them when it became clear that the unintended consequences were worse than the initial perceived threats. These consequences included spikes in illicit alcohol trade and deaths related to the consumption of unsafe illicit substances.
A measured and considered approach around alcohol during Covid-19 is viable, but for now we will have to educate ourselves on the risks while we wait for the lockdown regulations to be revised or for SA to enter a lower stage of the lockdown.
A total ban is unrealistic. There are solutions to our problems, and they do not have to jeopardise our economy and our people. The key is to engage with one another and work together to find an equitable solution.
SAB’s purpose of bringing South Africans together has never been more relevant than it is today. It is doing all it can to focus the power of its value chain on global socio-economic recovery. In normal times, beer is a formidable engine of economic growth; in a post-Covid world, it can be a critical driver of economic recovery.
Now more than ever, it is time for all of us to reset, recover and rebuild because we are all in it together.
Zoleka Lisa is vice-president of corporate affairs at the SA Breweries.