SOUTH AFRICA – Trade association spiritsEurope is urging the South African government to provide a clear and reliable timeline for the lifting of the alcohol ban imposed in response to COVID-19.
South Africa first imposed the ban on 27 March and lifted it on 1 June, and later re-imposed on 12 Julyfollowing a rise in trauma cases which was overburdening the already overwhelmed health-care system.
“While no clear evidence on the efficiency of such a measure in the COVID-19 context is available, we know that it has given rise to a sharp increase in illicit consumption and trade accompanied by high-risk behaviour and rising criminality rates,” stated spiritsEurope.
The EU is SA’s biggest trading partner. The Economic Partnership Agreement (EPA) signed between the two parties in 2016 allows for export of 110 million litres of South African wines duty-free into the EU region.
In return, the EU exports mainly spirit products into Southern Africa. Its 2019 exports amounted to EUR 255mn.This trade is now constrained due to the extended ban.
“The ban rips away all the benefits from the Economic Partnership Agreement between the EU and South Africa at a time when we should actually find ways to deepen our trading relations to support each other’s recovery processes,” said Ulrich Adam, Director General of spiritsEUROPE.
“Banning sales also means banning imports of European spirits, while South Africa continues to export particularly wine which has 110 million litre quota duty free export into EU under the EPA – contributing to R5.7 billion in net exports earnings for SA on alcohol.
“Our member companies operating in South Africa are deeply concerned about the uncertainty of current trading conditions. The lack of clarity on whether and when the ban might be lifted makes business planning impossible. We therefore need a clear and reliable timeline,” he stated.
spiritsEUROPE urges the European Commission to foster a dialogue with the South African government on this issue.
The alcohol beverage sector is one of the South Africa’s biggest employers, accounting for more than 1,000,000 direct and indirect jobs.
The ban is of course also having a devastating impact on small farmers, distilleries, packaging companies and hospitality outlets, many of which now face bankruptcy.
During the first ban, 476 liquor outlet robberies were reported. It is expected to take years and considerable financial resources to curb the illicit trend and bring back consumers into the legal system.
The ban also has dire economic consequences for the entire supply and distribution chain, hurting smallholder farmers who produce grains and grapes, as well as distributors and sector workers.
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