Namibia Breweries face stiff operating environment prompted by prolonged countrywide lock-down

NAMIBIA – Namibia Breweries Limited (NBL) a subsidiary of the Ohlthaver & List (O&L) Group has launched concerns on the prolonged prohibition of alcohol sales in the country that was imposed by the Namibian government to curb the spread of the corona virus.

The government banned the sale of alcohol during Namibia’s first lockdown on 27 March. The ban has been extended to 1 June, which will be stage 3 of lockdown.

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According to the company, if the ban is not lifted soon, the brewer will be forced to take some tough decisions in the interest of sustaining the business.

NBL Managing Director Marco Wenk said that the prolonged ban has affected its production and revenue, as well as over 300, 000 Namibians linked directly and indirectly to both the formal and informal alcohol trade.

“All alcoholic beverage sales, specifically those above 3% alcohol content, are by far the largest part of NBL’s business and have unfortunately been banned since 28 March until the end of the lockdown measures,” Wenk said.

“It is very unfortunate that our industry has been brought to a virtual standstill, but we are committed to complying with the directives and are using this time to work with other industry players to ensure safe and responsible trade can resume without delay,” he said.

A report by The Namibian reveals that, export markets such as Zambia and Tanzania, where alcohol sales are permitted, would be resumed, but come with significant route-to-market challenges and costs, making these options less viable.

The managing director indicated that the company is not considering retrenching employees as this will be the last resort, but it has taken various cost-cutting measures, including salary reductions of executives, while the remaining over 900 employees have been receiving their full salaries.

In other related news, South African Breweries (SAB) has entered into an agreement with the South African government on a way forward to safely transport its packaged inventory, both alcoholic and non-alcoholic, from its manufacturing plants to its depots in the next few weeks.

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The agreement comes after SAB last week warned that it could be forced to pour 132 million litres of beer down the drain. It said the beer had been sitting in tanks because of the lockdown.

The alcohol beverage industry in South Africa is also suffering huge losses because of the ban on the sale of alcohol since the National State of Disaster was declared by President Cyril Ramaphosa.

The distribution and sale of alcohol remains restricted as per Level 4 lockdown regulations.

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