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Cape Town – 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 scheduled for Wednesday.
“We believe 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 in a statement 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 are asking 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 long been closed by the government.”
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’ve seen small businesses and craft breweries get the biggest hits. A survey by our member, the Craft Brewer’s Association, found that 87.5 percent of craft breweries were threatened with stalling after the third general ban on alcohol sales. The majority of these companies has no survival beyond the end of February, “said Basa.
The alcohol industry’s potential loss of sales was R 36.3 billion, with the total annualized loss to GDP being R 51.9 billion, which is 1 percent of GDP. Even more worrying were the 200 to 200 jobs that remained at risk in the alcohol industry, “which is vital in the current conditions.”
“Basa would like to reiterate the urgent need for further payment deferrals and financial relief with regard to the automatic renewal of the liquor license if we are to have any hope of bailing out the remaining companies.”
Since the pandemic began, the beer industry had helped mitigate the economic impact of lockdown on the poor and homeless. Over four million meals were served to hungry South Africans from the craft brewers’ resources, premises, staff and distribution networks.
A brewery in Cape Town, Woodstock Brewery, had served up 2.9 million meals to hungry Cape Town residents after a massive fundraiser among craft beer enthusiasts.
“This business is now unfortunately about to close due to lost revenue. It is a truly tragic reality when those who have fed others go hungry themselves.
“While Basa continues to work openly and transparently with the government, we as an industry association cannot keep companies alive on our own.”
The national government had to come to the table – and quickly – if it did not want to increase South Africa’s already extraordinarily high unemployment rate of 30.8 percent, Basa said.
Basa consists of the Craft Brewers Association, Heineken South Africa and South African Breweries.
African News Agency (ANA)