The continued ban on alcohol sales is now posing a threat to South Africa’s largest trade partnership with the European Union (EU). In a shocking development, Mzansi’s alcohol industry now pleads with government to think carefully about its next steps in response to the controversial covid-19 regulations.
Spokesperson for the SA alcohol industry, Sibani Mngadi, says in a media statement released on behalf of the country’s biggest liquor role players that it is important for government to consider the overall effect of the sales ban
“With progress being made in the health response to the pandemic, it is critical for government to limit further the negative impact of the ban in the local economy and on our international obligations as a country,” says Mngadi.
This comes after concerns were raised by spiritsEUROPE, representing spirits producers at EU level, regarding imbalances in trade between South Africa and the European Union caused by the ban.
spiritsEUROPE also urges South Africa in a media release to cancel alcohol prohibition quickly or risk devastating consequences, both at home and abroad.
The EU is South Africa’s biggest trading partner. The Economic Partnership Agreement signed between the two parties in 2016 allows for the 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.
Director-general of spiritsEUROPE, Ulrich Adam, said banning sales also means banning imports of European spirits. This, while South Africa continues to export particularly wine which has 110 million litres quota duty-free export into EU under the EPA – contributing to R5,7 billion in net exports earnings for Mzansi 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,” Adam says.
The organisation further urges 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.
The South African economy has already lost an estimated R13 billion in direct capital investments with South African Breweries, Heineken, and Consol Glass all halting their capital expansion projects last week due to the ban.
