The craft brewery sector is facing a bleak future as the industry continues to shed jobs. Questions about its existence have caused uncertainty and leaders in the sector have said while there are many who want to become craft beer brewers, its sustainability was not certain.
Patricia Pillay, chief executive of the Beer Association of South Africa (Basa), said many factors such as load shedding and the slow economic recovery from the Covid-19 pandemic, have thrown the sector into tough times. This includes the recent closure of the Soweto Gold Brewery.
Lack of stability
Pillay said the interconnectedness of the sector were not only affecting the brewers but also hop farmers who lose out on suppliers, which lead to farmers not able to sustain jobs.
According to Pillay, each craft brewery employs between six to 10 people. “Any closure of a brewery has a financial impact on suppliers. To give you an idea of how large and interconnected the brewing industry is, it sustains no less than one in every 66 jobs in South Africa.
“Hops farming certainly deserves more attention, with hops farms in the Western Cape employing just over 1 500 permanent workers and thousands of seasonal workers, contributing R90 million annually to the economy,” she explained.
Pillay said the economic climate in the country has not favoured craft breweries and there was a need to urgently intervene to save thousands of jobs from primary agriculture (hop farmers) to brewers.
“It is also estimated that 30% of craft brewers had to close their doors permanently. Load shedding has had a major impact; brewers need at least nine hours of uninterrupted electricity supply to brew a batch of beer.”
“Load shedding above stage 3 makes it impossible to complete this process. Power outages have also disrupted the delivery of raw materials to produce beer as well as the packaging and delivery of beer to customers,” she said.
We cannot do it alone
Pillay said there is little that could be done by the sector without the involvement of the government to save jobs as there is a need for policies favouring small businesses.
“Each craft brewery has its own financial difficulties. Whatever the situation with Soweto Gold, I can certainly say that they, like other breweries, have been operating in an economic climate that is often hostile to smaller craft brewers.
“This needs to change. We need a different approach, we need government to introduce regulatory and legislative certainty, policies that support small businesses, concessions and incentives to support small business including in the alcohol sector, “she said.
Pillay said there were more than 200 craft brewers in South Africa who are passionate about growing the economy and the country.
“Basa will continue pushing for regulatory changes that assist craft breweries and the beer sector to recover, including changes to ensure a fairer excise regime is in place,” she said.
Meanwhile Wendy Pienaar, chief executive of the Craft Beer Association of South, said she believes the sector is slowly on recovery mode post-Covid-19 pandemic.
“I think the sector has recovered post-Covid-19. We have lost of breweries and customers and we have not gotten them back. I do not think we will get them again, but I think the breweries who managed to get through Covid-19 have recovered, so things are looking a bit positive,” she said.
Pienaar explained that closures of craft beer producers did not only affect the workers, but also the local economy of the areas they operated in as many people were reliant on them. However, she believes that the sector is well on its way to recovery and needs support by local communities and all the stakeholders.
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