Alcohol ban: SA govt loses R1bn every month

Alcohol ban: SA govt loses R1bn every month
SINTAX: Beer brewing giant SAB says the loss in excise as a result of the ban on alcohol sales is costing the SA Govt a billion a month in tax revenue. PICTURE BY Engineering News

The brewer would by now have paid over R14 billion in taxes to government if it was not for the ban.

The South African government is losing an estimated R1 billion each month owing to the ban of alcohol in the country.

This is according to brewer SAB.

The company said the government loses a lot of money to the sale of illicit alcohol, because the the dealers don’t pay tax.

Alcohol sales have been banned in South Africa since President Cyril Ramaphosa announced the national lockdown towards the end of March 2020 as part of curbing the spread of the Corona Virus.

“With no production in April, an entire month’s excise on beer is lost and probably won’t be able to be made up in this year,” said Hellen Ndlovu of SAB, adding that illicit alcohol sale accounted for 30% before a lockdown was imposed.

Now this is 100%, Ndlovu said.

The SAB, which used to be owned by the SA government, was sold for R1.4 trillion to the world’s largest brewer Anheuser-Busch InBev in 2018.

“SAB has collaborated with government and reached an agreement which will enable the company to transport its beer inventory over the course of the next few weeks and to avoid losses in excise tax for the government to the value of R500m,” the company said in a statement. 

With this agreement being reached, the company is avoiding 132 million litres of beer being poured down the drain, it said. 

SAB rival competitor Distell said it was also disrupted by the lockdown and also made financial losses. However the company said it is currently making some small income from the sales of sanitisers to fight Covid-19.

The company generated R8 million in the hygienic business since the lockdown was imposed in March.

“As a result of the short-term success and order pipeline the group is investigating in this as a sustainable business opportunity going forward,” Distell said. 

(edited by MLM)

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