With a contribution of about 35% to the Gross Domestic Product (GDP), SMEs are a significant pillar of South Africa’s economy. Even during pre-Covid-19 times, the country faced considerable challenges ranging from load shedding and a contracting economy to record-high unemployment rates and the crisis of state-owned enterprises. Through it all, small business has always been the bedrock of our society; a vital gateway to unlocking the economy and stimulating much-needed job creation opportunities.
Despite having the best intentions, South Africa’s women empowerment agenda in relation to entrepreneurship is essentially flawed given that female entrepreneurs still struggle to access finance in comparison to their male counterparts. In addition, women lack access to networks and markets that are critical for building scalable businesses. According to a World Bank report, only 38% of SMEs are owned by women, despite accounting for more than half of the total population.
Over the last 24 months, gin has made a remarkable comeback not witnessed in more than a century, and took the entire world by storm. South Africa was part of this phenomenon, as seen through the blossoming of about 400 brands of locally created artisanal and craft gins since then. It was within the gin revolution that Inverroche Gin grew exponentially from being a small home industry to a flourishing and pioneering craft distillery. The business was born from the desire to create a sophisticated, world-class range uniquely South African, coupled with an aspiration to uplift the community and empower women. This was the driving force behind starting my business.
There were many firsts in the business, including being the first creators of craft gins, pioneering the use of fynbos as the core ingredient, and the first to go to market with coloured gins.
Not only did our growth as a woman-owned business allow us to employ local people – 70% of whom are indigenous women who are heads of households – but it also created a ripple effect for pockets of growth in other areas of the local Still Bay economy. As a result of the general appetite for gin and interest in the unique composition of Inverroche, the area attracted tourists from various corners of the world, allowing the hospitality and related industries to flourish.
The historic deal with premium spirits distributor Pernod Ricard last year also provided a platform that would allow us to introduce our brand and heritage to uncharted markets across the globe. However, this was not without its challenges.
With huge orders received from the United States, demand outstripped supply. As a result of the inability to deliver, we were faced with clients who were fast losing interest and trust. The next step would have been to work on rebuilding critical partnerships, trust and confidence lost. However, this ground to a halt due to the national lockdown in response to the Covid-19 pandemic, and, more recently, the government’s reinstatement of the suspension of the sale and transportation of alcohol.
The export market remains particularly important as our gateway to accessing markets in the continent and abroad. So, while manufacturers are allowed to export, the initial nine-week hard lockdown also posed serious challenges, which include the fact that many industries had to come to a standstill. This delay, coupled with bureaucratic processes at ports, created a knock-on domino effect leading to a significant lag in the export of goods.
As many of those advocating for the lift of the alcohol ban have said, the impact on livelihoods is nearing devastating levels. Many of the businesses that were operational before have been forced to shut down, leaving very few options for those who depended on them – other than falling through the cracks of the state welfare system.
The alcohol ban has left a trail of helplessness, desperation and deep uncertainty about the future for many stakeholders in the value chain, including packaging, labelling and bottling companies, tour operators, bartenders and many others.
As the national agenda steers towards “buying and supporting” local, the irony is that there is neither a regard of what local economy means to the broader economy, nor an indication of good understanding of the drivers of wealth on a local and national level.
For those caught in the eye of the alcohol ban storm, what we know for sure is that there may be no local economy left to support or buy from in the near future. BM/DM