Underground trade on the rise as speakeasies take off in dry SA
Some restaurants are resorting to sell alcohol in bid to survive and save jobs amid Covid-19 ban
In an Italian bistro in an upmarket Johannesburg neighbourhood, smiling patrons chat at candlelit tables in a scene reminiscent of less-troubled times before the Covid-19 pandemic.
But there is no alcohol on the menu. Instead, diners order red or white “coffee” served in grey mugs, the telltale sign of a modern-day SA speakeasy.
Under one of the world’s strictest lockdowns, SA banned alcohol to lower hospital admissions for injuries from drink-related violence and accidents and ease the burden on health workers facing the worst coronavirus outbreak in Africa.
But businesses from wine makers to restaurants to informal taverns say the ban is costing jobs at a time when the economy is on its knees and President Cyril Ramaphosa is coming under pressure to end the prohibition as infection rates fall.
“Am I happy with what I’m doing? No,” said the bistro owner, who asked not to be named, adding that alcohol sales had saved him from firing half a dozen staff. “They’ve turned everybody into criminals.”
Restaurant workers, among the hardest hit by layoffs, protested in July calling for the right to sell alcohol while lobby group Agri SA said the ban had cost the wine industry R3.3bn and 117,000 jobs.
Local media reported this week that the government body charged with managing the health crisis has recommended loosening lockdown restrictions and that has fuelled speculation the ban might be lifted, possibly as soon as this weekend.
The presidency did not immediately respond to requests for comment.
Introduced in March, restrictions on alcohol sales have spawned a thriving underground industry, complete with bootleggers and online traders offering doorstep delivery.
More recently, as authorities allowed sit-down dining to resume, some restaurants have joined the illicit trade.
Just doors down from the Italian bistro, Reuters found at least two more restaurants flouting the ban, seating drinkers in back rooms or serving wine in bottles labelled “nonalcoholic”.
According to statistics through July, police had arrested more than 6,000 people on charges related to the ban.
But with alcohol now so readily available to thirsty South Africans, some question whether the measure is still enforceable, and bootleggers who once thrived under the ban are taking a hit to their business.
“A lot of people have their own contacts now,” one 27-year-old bootlegger told Reuters.
As the underground trade flourishes, however, legitimate businesses complain they are paying the price.
Since the ban came in, Dutch beer maker Heineken has dropped plans to build a new R6bn brewery while AB InBev’s SA Breweries has postponed a R5bn investment.
In recession even before the pandemic, the economy is now set to contract by more than 7% in 2020 with a unemployment rate above 30%.
The growing economic fallout, coupled with indications the outbreak may be receding, have piled pressure on President Cyril Ramaphosa to end the prohibition.
“Illicit alcohol trading is shooting through the roof and the government is losing billions in tax and excise income,” Mihlali Xhala, head of the corporate chamber of Agri SA, said in a statement this week. “If our main priority is economic recovery, this is definitely not helping.”
SA has recorded more than 560,000 coronavirus cases and more than 10,700 deaths, by far the highest recorded total on the continent. Daily new cases have now fallen to their lowest level since mid-June.
But despite progress in curbing the spread of the disease, some experts warn that repealing the alcohol ban risks eroding the benefits that have allowed the health system to cope.
“Going back to business as usual will go back to trauma carnage as usual,” said Prof Leslie London, head of public health medicine at the University of Cape Town.
Before the lockdown, alcohol-related cases accounted for about 40% of hospital trauma admissions, according to the SA Medical Research Council.
In the two months after the ban was introduced, the Western Cape health department recorded a 40% to 50% drop in trauma cases.
“It substantially removed an unnecessary burden on the health services, which enabled hospitals to ready themselves for Covid-19. There is no dispute possible about that,” said London.
Four months into the lockdown, however, some South Africans now say they too need relief.
“You're locked up in one space,” said one drinker, who asked not to be named, served wine from a bottle labelled “nonalcoholic” at a tapas bar down the road from the Italian bistro.
“The main reason for buying alcohol is just to kind of regain some of those moments of just letting loose.”
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