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Warning over further alcohol restrictions for South Africa | Muhabarishaji News

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The South African liquor industry has warned in a recent statement that continued alcohol restrictions will lead to thousands of job losses.

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LIQUOR RETAILERS HAVE BEEN LOSING ABOUT 50% OF REVENUE

The Consumer Goods Council of South Africa (CGCSA) and the Liquor Traders Association of South Africa (LTASA) recently commissioned research on the impact of COVID-19 Regulations on the Liquor Industry, particularly the off-site consumption liquor sector.

The research concluded that the four-day trade restrictions imposed on retail liquor stores are unjustifiable, discriminatory and uncompetitive.

The restrictions have also fuelled the illicit market with significant revenue losses for the government.

According to the study, liquor retailers have been losing about 50% of revenue they would have earned from Thursday to Saturday, yet overhead costs have remained unchanged. The revenue losses for small liquor outlets were as high as 65% of weekly turnover between Friday and Sunday.

“To put this in perspective, aggregate loss in sales since the inception of lockdown stands at approximately R8.5 billion; sales volume has dropped by 20%-50% across the retail formats per month and with 60% of convenience trading being done mostly post 5 pm on weekdays and on weekends these figures are predicted to continue on a downward scale with great harm to business and jobs.”

It furthermore said in addition to cutting staff and costs, retailers have been negotiating with landlords to reduce rentals, which in turn affects the revenue of commercial property owners.

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“Some have reduced staff working hours and wages, diversified products/service lines, or changed/improved operations models to adapt to new conditions.

“Yet others have explored e-commerce focus/capabilities, cut discretionary spending, canceled salary increases, renegotiated leases or debt repayments, or applied for government support, although not all have received the required funding.

“The economic impact of the restrictions has been dramatic and devastating on the SMME businesses with the resultant severe impact on their employees and families. The continued bans on the sale of alcohol without significant Government support, e.g. COVID TERS could see the decimation of the independently owned liquor store sector,” said the LTASA.

CGCSA warns that the longer the government continues to restrict the off-site consumption and the more it imposes restrictions on the alcohol industry and value chain, the higher the probability that illegal trade will become further institutionalised, whilst many licensed liquor traders will face bankruptcy as they continue to lose a significant portion (three days) of their weekly revenue.

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