Liquor retailers are deserving of government reconstruction support

Having been criticised in some quarters for a slow and inadequate response to the recent looting, government has worked hard to put in place support measures to help businesses rebuild and help workers whose jobs have vanished under the rubble.

These packages are worth R3.75bn, with key stakeholders being the Industrial Development Corporation (IDC), the departments of trade, industry and competition and small business development, the Small Enterprise Finance Agency (Sefa) and the National Empowerment Fund (NEF).

I appreciate the fact they have put these packages together relatively speedily, tapping into and reallocating different funds to support companies that have been directly affected and putting in place top-up and bridge-funding mechanisms at concessionary rates.

In a webinar I attended last week, all the key government stakeholders emphasised they were working hard to ensure they put in place processes to turn applications around quickly. This is key — what companies need right now is a speedy response.

I have spent the last three weeks speaking to businesses that were directly affected by the rioting. Of the 15 retail outlets I have spoken to, only three have managed to resume trading several weeks after the unrest as they wait for insurance claims to be paid out (for those that were privileged enough to be insured). Jobs and sources of income are on the line as they wait in limbo.  

The state’s insurance agency, Sasria, which does insure against the fallout from riots, has understandably been inundated with claims and this is reflecting in slow processing, including of relatively small claims of less than R500,000.

While the focus is on financial losses, there is also the human element that we must not ignore. Small businesses that have been built up over generations and just happened to be in the wrong place at the wrong time now resemble bomb sites. Dreams and sacrifices have literally gone up in smoke. How traumatic!  

Whether your looted business is black- or white-owned, you are eligible for help under almost all the emergency support measures. However, once again the liquor industry has fallen victim to an inexplicable policy.

If you are a supermarket that has a wine section, you are covered. No exclusion there. But woe betide the stand-alone liquor stores. They have been specifically excluded from the Sefa business recovery package, as are tobacconists. It is not clear whether the liquor or tobacco industries will be supported by the NEF and IDC, given the stance taken by Sefa.

Bottle stores operate within the law, they require licences to operate, employ people and help raise and collect taxes for the fiscus. They are as legal as any other business that was hit hard by the looters.

Of course, alcohol abuse is a serious problem, but so long as these retail outlets are legally licensed and operate within the law they should be as deserving of reconstruction support as any other honest, upstanding retail outlet. This is particularly sad as there aren’t many other sources of help or funding these pariah proprietors can access.  

And don’t forget the liquor retailers were severely hit by a succession of lockdowns — and are in fact still in partial lockdown. They make most of their money during weekends but are only allowed to operate for limited hours on Mondays to Thursdays. There have also been periods when they were not able to trade at all.  And just as they were already struggling to stay afloat, the riots occurred.

Government must be made to account for its stance. Do our ministers want to kill off these liquor traders, to put the boot in as they lie wounded on the ground? This was not light-fingered looting. Some stores lost all their electrical cables, all their shelving.  

How many of these have the cash flow to get back in business, especially those without insurance?  So while I commend the reduced red tape, the dedicated teams that have been set up and the faster turnaround times that have been promised, I implore government to revisit its stance on the already battered liquor industry.

• Blake is the head of incentives at Cova Advisory.