The Co-Chairman of the Consumer Goods Council of South Africa (CGCSA) Gareth Ackerman has called on the government to remove restrictions limiting alcohol sales to four days, saying the financial losses to retailers have become unsustainable. Jobs were also under threat said Ackerman.
“Currently, retailers selling liquor for responsible consumption at home are restricted to operating from Monday to Thursday. However, those selling liquor for on-site consumption, like bars and taverns can trade for a full seven days. This makes no sense for a sector that accounts for only 30% of the total liquor throughput. If the reason to restrict liquor sales is to prevent people congregating under the influence of alcohol, then why allow bars and taverns unrestricted trade, while penalising traders that cater for home consumption?”
Ackerman says the liquor retail industry – particularly the small and independent traders – is currently in extreme distress with enormous and far-reaching implications for many jobs and the whole value chain, which includes farmers, liquor production, warehousing and logistics, to construction of new retail outlets. The limited restriction is no longer financially sustainable and is now threatening the survival of retail liquor outlets and jobs in the sector.
The sector is losing about 50%-60% ofliquor sales volumes on Friday-Saturday and between 10%-18% on Sundays every week, given that consumer spent increases on Fridays to Sundays. These losses are unsustainable and irrecoverable and will have long-term effects on businesses and the wider economy, he says.
“It is pertinent to note that 60% of the liquor retailers are SMEs who rely heavily on weekend trade. The SMEs liquor retailers are already retrenching because the four-day trade cannot sustain their businesses. Any additional job loss is one job loss too many and adds to the already overburdened social budget facing the fiscus which will have to provide social grants to some of these employees,” Ackerman says.
Ackerman says he does not agree with the logic put forward by the government to restrict trading for off-site liquor consumption to only four days. This is because the arguments are not backed by scientific evidence that consumption of liquor bought from retail liquor outlets contribute to high trauma cases at public and private health facilities. On the contrary, home/off-site consumption helps in the fight against Covid-19 by reducing mobility and controlling trauma cases, which in turn reduce the burden on the hospitals and the health sector.
“The restriction of off-site liquor is further fuelling the already entrenched illicit trade in liquor which is costing the fiscal approximately R6.4 billion per annum. The law enforcement agencies are already over-stretched to be able to react to infringements and enforcement of the rules against illicit alcohol and tobacco. The reality is that these restrictions are also increasing illegal trade while reducing legal trade with the resultant significant revenue losses to both the government and retailers. We therefore call on the government to implement parity and allow retail liquor traders to operate as optimally as possible given the stress facing retail liquor traders,” Ackerman says.