Business Maverick


South Africa’s renewed booze ban may deal the final blow to crippled restaurants

Empty restaurants during adjusted lockdown Level 4 on 29 June 2021 in Cape Town. (Photo: Gallo Images / ER Lombard)

Although President Cyril Ramaphosa lifted Covid-19 restrictions on sit-down restaurants on Sunday evening, owners of eateries, bars and businesses in the hospitality sector were still feeling the blues on Monday as the total ban on alcohol sales remained in place.

South Africa’s food and beverage industry in 2020 was worth around R43.6-billion, according to data from Statistics South Africa, but that was down from income of R71.4-billion in 2019 – an indication of the devastating toll taken by lockdown restrictions that began in March last year. 

The picture does not look much better in 2021, with sales between January and March still well below the comparative monthly sales in previous years. And the list of restaurant closures around the country is growing longer by the day – more than 1,000 by some tallies. 

The fourth prohibition on alcohol sales in 18 months, a ban that was imposed in late June in response to soaring coronavirus infections driven by the highly infectious Delta variant – and which was renewed for another two weeks on Sunday by Ramaphosa – may deal the final blow to restaurants already teetering on the brink. 

The alcohol industry has previously challenged the bans, but unsuccessfully. South African Breweries (SAB) and winemakers Vinpro have both launched court challenges against the move. They are due to be heard this week. The government has countered the claims, saying that alcohol is linked to higher cases of hospitalisation, adding pressure to the already stretched health system.    

Vinpro called the booze ban a “blunt instrument” that would lead to more job losses, saying that a survey conducted in early July found that 22% of wineries and wine-related businesses would not survive another lockdown with restrictions on alcohol sales. Vinpro said black-owned businesses would be particularly affected. 

Wendy Alberts, chief executive of the Restaurant Association of South Africa, said she was disappointed by the latest ban, especially since the government had not provided conclusive evidence of a link between alcohol consumption and higher Covid-19 cases. 

“We need to separate the conversation between alcohol and transmissions. Are we [restaurants] high-risk areas of transmission? If we are, then give us the evidence and expedite the vaccine for the frontline staff,” said Alberts. 

“Why shut down the alcohol industry, one of the largest contributors to tax, which could have paid for 100 new hospitals over time?”

The cost of last year’s alcohol bans is estimated at R5-billion and more than double that amount if the total impact of the lockdowns on restaurants are considered. 

The South African Revenue Service said in April it had lost about R14-billion in tax revenue due to the bans and pausing of excise duties. In the first quarter of 2021, the trade sector, of which the restaurant industry is a big part, shed 84,000 jobs. BM/DM


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All Comments 3

  • The loss of restaurants and wine farms will in turn lead to a loss of tourists, which will lead to a loss of hotels, airbnb accommodation, municipal rates, jobs….

  • President Ramaphosas’ response to the Covid 19 pandemic in South Africa has been the response of a 1st world leader to his 1st world countryman.
    We are not a 1st world country.
    We are a 3rd world country with elements of 1st world activities. Locking down the whole country is just not the correct response to a unique country with its uniquely high levels of unemployment and poverty. Rather he should have left the provinces to dictate their own levels of reaction to rising cases of Covid infections. The normal and boringly simple social distancing, wearing of masks and hand washing should have been sufficient. Mass immunizations should have been a priority early on in cahoots with private medical aid organizations. Banning of alcohol sales was and is the wrong reaction to keep hospital beds in state hospitals free for Covid patients. Rather give the hospitals authority to refuse entry to victims of alcohol fueled violence. Simple!! Easy as that! Keep the economy going at all costs even if it means a high level of infection in the populace. After all most people survive Covid infection and those that need hospitalisation could be accomodated even in tented hospitals.
    All much better than the costs of looting and destruction evidenced at present.

  • Quite frankly, if the government can’t stop the looting and criminal activity taking place in 2/3rds of the country, I very much doubt they can stop restaurants from serving alcohol. There would be enormous class actions based on racist lines if they tried! What’s good for the goose is good for the gander surely? And after all, a few beers and glasses of wine is much less damaging than destroying a country’s entire economy. In my opinion anyway!

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