South Africa’s alcohol sale inches closer to normalcy following relaxation of COVID-19 restrictions

SOUTH AFRICA – South Africa alcohol industry is elated following the recent move of the country to Level 1 lockdown, permitting sale of alcohol for both offsite and onsite consumption, to resume under normal licence provisions and business operating hours.

The decision to ease lockdown regulations comes amid a drop in Covid-19 cases, test positivity rates, and hospitalisations, reports Fin 24.

Under the new directive, sale of alcoholic drinks has once again been permitted not only on weekdays but also weekends. However, no alcohol may be sold after 11pm.

This means that alcohol sales will be allowed until 11:00 p.m at bars and restaurants while liquor stores will operate at normal business hours.

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Under level 2 restrictions – liquor stores could sell alcohol for offsite consumption between Mondays and Fridays, and had to operate between 10:00 a.m and 6:00 p.m. Taverns and restaurants were limited to serving patrons until 10:00 p.m.

The South African Liquor Brandowners Association (Salba) has expressed its support for the decision to lift alcohol trade restrictions and urged government to work with business to define a clear and detailed path to economic recovery, reports BizCommunity.

Salba Chairperson Sibani Mngadi said, “The government has finally shown its understanding for the sector’s dire plight by lifting the irrational restrictions on the sale of alcohol from retail outlets for off-site consumption on weekends.”

The alcohol industry reiterated its support for public education and awareness efforts to encourage vaccination and encourage behaviours that prevent infections, such as social distancing, wearing masks, and regular use of sanitisers.

Meanwhile, retail players such as Pick n Pay are still counting their losses triggered by severe trading disruptions due to unrest in KwaZulu-Natal and parts of Gauteng in July, as well as restrictions on liquor sales, amounting to a loss of R1.7 billion (US$113m) in sales in the second quarter of its financial year.

The group which is in the process of finalising its interim results for the period ended August 2021, has highlighted that turnover from March to August 29 rose 4% to R46 billion (US$3.07 billion) compared with the same period in 2020.

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Pick n Pay calculates a loss of R800m (US$53m) in alcohol sales due to weekend sales bans and although it is not yet possible to quantify the full impact of the business interruption on sales and earnings, the group estimates that it resulted in approximately R930 million (US$61.9m) loss in sales.

The retailer has indicated were it not for the lost sales, its revenue would have been 8% higher.

Nevertheless, the group said its first-half earnings will demonstrate continuing benefits from its modernisation programme – including a more efficient supply chain, more cost-effective store and support office operations, and strong management of working capital and capital investment.

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