Alcohol industry’s sober Covid-19 reality
The thirteenth session of the Agricultural Value Chain (AVC) Virtual Discussion Series explored the reach and competitiveness of this value chain, as well as the dire impact the current alcohol ban continues to have on its productivity and longevity. This time around, the panel of industry professionals included the likes of Dr John Purchase, Agbiz; Maryna Calow, Wines of South Africa (WOSA); Hellen Ndlovu South African Breweries (SAB); Lucky Ntimane, National Liquor Traders Council (NLTC); Sean Robinson, Liquor Traders Association South Africa (LTASA) and Andre Muller (Pernod Richard South Africa).
A wide reaching industry
In terms of numbers, the alcohol industry represents a wide reach both nationally and internationally. The panel members shared the following statistics, as it applies to them, in this regard:
- WOSA: 500 members, all exporting their products abroad.
- LTASA: 1 400 independent retailers and wholesalers with 15 000 employees.
- NLTC: representing more than 34 500 licenced tavern owners and 200 000 dependents. Add to this the 10 000 shebeen permit holders and their dependents.
- SAB: sources its produce from 1 277 farmers across South Africa of which 757 are emerging farmers.
The impact of the alcohol ban
On 12 July, President Cyril Ramaphosa announced the reinstatement of the ban on the sale, dispensing and distribution of alcohol with immediate effect. This announcement did not only catch many South Africans by surprise, but also left the alcohol industry in a state of panic.
The ban has a major effect on the entire value chain.
According to Maryna Calow (WOSA) the wine industry has been enduring losses amounting to R4.5 million per week in terms of local sales, while export losses amount to R300 million per week. This does not include wine tourism, which contributes to another R1 million per week.
The ban furthermore hampers industry growth and transformation with hundreds of SMME and micro liquor manufacturers facing downsizing and even closure. Smaller brands who have the potential to become future market influencers now find themselves not being able to weather the storm. Hellen Ndlovu (SAB) agrees and adds that the uncertainty of the current situation takes its toll on all involved. She explains that farmers just planted and that there is no surety that, as a manufacturer, they will be able to take up all of the produce at the end of the cycle.
“The entire value chain is suffering” says Andre Muller (Pernod Richard South Africa) and states that the ban has several ripple effects. These include lay-offs, retrenchments, a shrinking consumer base and a loss of general momentum within the industry. The latter will play out over the course of the next few years.
All panel members agree that the longer the ban is in place, the more dire the situation will become.
The value of collaboration and engagement
Lucky Ntimane (NLTC) says that the crisis has managed to bring the industry together as a whole and that the level of collaboration and engagement has increased sharply. The rest of the panel shares this sentiment and expressed their hope of continued collaboration post-Covid-19.
“Before the industry was very fragmented and we only focused on each other as competitors. It is reassuring to know that now we are aligned and united in our efforts to not only get the ban lifted, but also to deal with the looming surge in demand that will follow. This newfound cohesion will also go far in assisting us to come up with a much-needed harm reducing strategy for the industry,” says Sean Robinson, LTASA.
Don’t miss session 14 which focuses on the wine industry – Visit http://www.senwes.co.za/en-za/agri-value-chain to for more detail and a recap of all the discussions.
The thirteenth session of the Agricultural Value Chain (AVC) Virtual Discussion Series explored the reach and competitiveness of this value chain, as well as the dire impact the current alcohol ban continues to have on its productivity and longevity. This time around, the panel of industry professionals included the likes of Dr John Purchase, Agbiz; Maryna Calow, Wines of South Africa (WOSA); Hellen Ndlovu South African Breweries (SAB); Lucky Ntimane, National Liquor Traders Council (NLTC); Sean Robinson, Liquor Traders Association South Africa (LTASA) and Andre Muller (Pernod Richard South Africa).
A wide reaching industry
In terms of numbers, the alcohol industry represents a wide reach both nationally and internationally. The panel members shared the following statistics, as it applies to them, in this regard:
- WOSA: 500 members, all exporting their products abroad.
- LTASA: 1 400 independent retailers and wholesalers with 15 000 employees.
- NLTC: representing more than 34 500 licenced tavern owners and 200 000 dependents. Add to this the 10 000 shebeen permit holders and their dependents.
- SAB: sources its produce from 1 277 farmers across South Africa of which 757 are emerging farmers.
The impact of the alcohol ban
On 12 July, President Cyril Ramaphosa announced the reinstatement of the ban on the sale, dispensing and distribution of alcohol with immediate effect. This announcement did not only catch many South Africans by surprise, but also left the alcohol industry in a state of panic.
The ban has a major effect on the entire value chain.
According to Maryna Calow (WOSA) the wine industry has been enduring losses amounting to R4.5 million per week in terms of local sales, while export losses amount to R300 million per week. This does not include wine tourism, which contributes to another R1 million per week.
The ban furthermore hampers industry growth and transformation with hundreds of SMME and micro liquor manufacturers facing downsizing and even closure. Smaller brands who have the potential to become future market influencers now find themselves not being able to weather the storm. Hellen Ndlovu (SAB) agrees and adds that the uncertainty of the current situation takes its toll on all involved. She explains that farmers just planted and that there is no surety that, as a manufacturer, they will be able to take up all of the produce at the end of the cycle.
“The entire value chain is suffering” says Andre Muller (Pernod Richard South Africa) and states that the ban has several ripple effects. These include lay-offs, retrenchments, a shrinking consumer base and a loss of general momentum within the industry. The latter will play out over the course of the next few years.
All panel members agree that the longer the ban is in place, the more dire the situation will become.
The value of collaboration and engagement
Lucky Ntimane (NLTC) says that the crisis has managed to bring the industry together as a whole and that the level of collaboration and engagement has increased sharply. The rest of the panel shares this sentiment and expressed their hope of continued collaboration post-Covid-19.
“Before the industry was very fragmented and we only focused on each other as competitors. It is reassuring to know that now we are aligned and united in our efforts to not only get the ban lifted, but also to deal with the looming surge in demand that will follow. This newfound cohesion will also go far in assisting us to come up with a much-needed harm reducing strategy for the industry,” says Sean Robinson, LTASA.
Don’t miss session 14 which focuses on the wine industry – Visit http://www.senwes.co.za/en-za/agri-value-chain to for more detail and a recap of all the discussions.