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Alcohol industry warns of possible trade restrictions as Covid-19 fourth wave takes hold

December 6, 2021

The alcohol industry has warned of possible trade restrictions during the festive season as South Africa has officially entered the fourth wave of the Covid-19 pandemic driven by the new Omicron variant as the hospitality industry called on President Cyril Ramaphosa not to lock down the country.

The Beer Association of South Africa (Basa) on Friday launched a High Court review application to declare three previous bans irrational, invalid and set them aside.

The application focuses on the decisions to enforce alcohol bans in July and December 2020; June 2021 as well as the decision to continue imposing further restrictions on the trade of liquor in and during July 2021.

The previous alcohol bans had a devastating impact on the alcohol industry and the economy as a whole, with R42.2 billion was lost in retail sales and 165 000 jobs lost.

The industry group comprising the Craft Brewers Association, Heineken SA and SA Breweries, said the making of Covid-19 regulations amounted to administrative action.

It said the government had failed to take into account the devastating impact of the bans on the alcohol industry and that the decision may be reviewed and set aside in terms of the principle of legality.

“Another alcohol ban over the coming festive season, a time when we expect some recovery for the tourism and hospitality sector, will serve as the final nail in the coffin for thousands of businesses/citizens who just barely survived the previous bans,” it said.

“Therefore, the previous alcohol bans should also be declared constitutionally invalid.”

On Friday, Health Minister Dr Joe Phaahla confirmed that South Africa has officially entered the fourth wave, with more cases reported in nine provinces.

“Today, as we enter the fourth wave with a new variant, we can see confirmation of this warning.

“What we can say is that we actually were alerted, as I indicated before this fourth wave, that it was coming.”

The country has moved from 2 465 cases a day to more than 16 000 daily infections in a matter of a week, representing a 24.3 percent positivity rate.

These frighteningly rising numbers could prompt the National Coronavirus Command Council to recommend a tightening of lockdown measures from Alert Level 1, including restricted sale of alcohol.

Under Alert Level 2, alcohol sale from retail outlets is restricted to Monday to Friday, 10am to 6pm while on-site consumption at licensed establishments is permitted until 10pm.

Last week, Ramaphosa said the government would closely monitor infection rates and hospitalisation over the coming days and will review the situation in another week.

The Capital Hotels and Apartments and Federated Hospitality Association of South Africa (Fedhasa), the national trade association for the hospitality industry, said in an open letter, “Dear President Ramaphosa: don’t lock us down now – or ever again!”

Another lockdown would be the final nail in the coffin of the South African travel, tourism, and hospitality industry that had already lost more than R1 billion in bookings for travel in the last week, with the tragic implication of more than 200 000 people losing their jobs. This is against a backdrop of South Africa’s worst unemployment statistic in history, that is likely to lead to tragic instability across our economy.

“The travel industry needs certainty for people to book with confidence and in advance,” they said.

Meanwhile, the International Monetary Fund (IMF) on Friday warned that global economic growth projections would likely be downgraded due to the emergence of the Omicron variant.

The IMF said in October it expected the global economy to grow 5.9 percent this year and 4.9 percent in 2022, but warned of downside risks posed by new Covid-19 variants.

IMF managing director Kristalina Georgieva, speaking at the closing of the Reuters Next virtual global conference, said the threat from the Omicron variant will impact confidence.

“A new variant that may spread very rapidly can dent confidence, and in that sense, we are likely to see some downgrades of our October projections for global growth,” Georgieva said.