South African Breweries (SAB), ABInBev's subsidiary in South Africa, has cancelled investments worth ZAR 2.5 billion (USD 165 million) after the government imposed its third total ban on alcohol within one year on 28 December. (inside.beer, 28.12.2020) The canceled investment relates to upgrades in production facilities including installation of new equipment at selected plants as well as investment in products and operating systems. Already in August following the second ban SAB cancelled investments worth ZAR 2.5 billion (inside.beer, 4.8.2020), so the total amount adds up now to ZAR 5 billion (USD 330m).
“Given the material impact that this third ban on the sale of alcohol has on our business and the possibility of further bans, we have no choice but to halt these investments for the foreseeable future,” said Richard Rivett-Carnac, Vice President of Finance at SAB. Last week the company announced to challenge the constitutionality of the latest alcohol ban in South Africa and take it to court. (inside.beer, 6.1.2021)
South Africa’s president Cyril Ramphosa said he was “obviously concerned” about the consequences of the ban on investments. “South African Breweries is an important corporate in our country, has so for more than a 100 years. And obviously we are concerned that they have taken this type of decision,” he said.
However, he also said that there were no alternatives to this decision, as the alcohol ban was showing its effect and would free up the required capacity in hospitals. “We have seen how the ban on alcohol for a period has actually resulted in terms of opening up spaces in our hospitals,” he said. “And utilization of hospital beds by people who come in from trauma like accidents, alcohol induced stabbings and so on, have been taking hospital beds that are much needed for dealing with Covid-19. So we have tried to balance.”
In a press release Saturday, Lucky Ntimane, convener of the Liquor Trader Formations (LTF), asked the president to permit offsite gross sales of alcohol gross sales with fast impact and to grant financial aid to taverns and informal licensed drinking place in township, so-called shebeens. Especially these premises should be exempt from paying liquor license charges for an interval of not lower than a year.