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Johannesburg – The South African Beer Association (Basa) has called on Finance Minister Tito Mboweni to offer tax breaks to the industry ahead of his budget speech on Wednesday.
“We believe that this is the least the government can do to help our members, especially small craft brewers whose businesses have been destroyed by 19 weeks of restricted trade,” Basa said on Sunday.
To help rebuild the local beer industry, Basa urged Mboweni to commit not to increase excise taxes for the coming fiscal year.
“At least we urge him to commit to increasing excise taxes on beer under inflation. We have to save jobs and livelihoods, but we cannot do this without targeted relief from the government, ”said Basa.
“We believe the unexpected R100 billion government revenue boost is an opportunity to offer tax breaks to companies that have been closed by the government for long periods of time.”
The three blanket alcohol bans – due to the Covid-19 regulations – had led to a fall in beer sales of 195 million liters since March last year.
“We have seen small businesses and craft breweries have the greatest success. A survey by our member, the Craft Brewer’s Association, found that 87.5% of craft breweries were threatened with grind after the third general ban on the sale of alcohol. The majority of these companies have no survival security beyond the end of February, ”said Basa.
The total potential loss of sales in the alcohol industry totaled R 36.3 billion, with the total annualized loss in GDP being R 51.9 billion, which is 1% of GDP. Even more worrying were the 200 to 200 jobs that remained in jeopardy in the alcohol industry, “which are faltering for survival in current conditions”.
Since the pandemic began, the beer industry had helped mitigate the economic impact of lockdown on the poor and homeless. Over 4 million meals have been served to hungry South Africans from the craft brewers’ funds, premises, staff and distribution networks.
“While Basa continues to strive to work openly and transparently with the government, we cannot keep companies alive as an industry association alone.”
Basa consists of the Craft Brewers Association, Heineken South Africa and South African Breweries.