KURT MOORE: Cheers! And bottoms up after the Covid-19 coma

There is a perceptible lift in the national mood since the move to Covid-19 alert level 1 and the easing of most restrictions. There is talk of vaccinated spectators being permitted at events, we have had the first live cycle race and marathon since the pandemic arrived on our shores, and the hospitality and tourism industries are gearing up to again welcome foreign visitors to SA.

Local families are making tentative plans for the upcoming holiday season. After a bitter winter of lockdowns, loss and civil unrest, the season is turning, and cautious optimism is taking root. This “mood swing”, in itself, can be a catalyst to restart a battered economy as consumers shed the siege mentality and anxiety about the future that have prevailed for more than a year.

Office workers are drifting back to previously lifeless central business districts and shops, eateries and bars that have been shuttered for months are waking from a pandemic-induced coma. This is good news for the hundreds of thousands of people who have either lost their jobs, been placed on forced leave or had to digest deep salary cuts while their places of employment were unable to trade.

Unfortunately, too many businesses have simply closed for good and once-vibrant city and town centres remain pale reflections of their former state. It will take years — and a conducive economic environment — to erase these scars. The alcohol industry, which I represent, has a critical role to play in this recovery, yet its contribution is poorly understood.

To many of the restaurant owners pinning their hopes of survival on the upcoming holiday season, alcohol sales are an important revenue stream without which they battle to break even, while many would-be diners will stay home rather than pay for a meal without an accompanying drink. Waiters earn bigger tips on higher bills to augment their basic pay when they are able to sell alcohol, and taxi and ride hailing services do more business when restaurants and clubs are buzzing.

The tourism industry has similar dependencies on the alcohol trade. SA’s world-famous wine regions are a tourist attraction in its own right, bringing foreign currency and business activity to the Western Cape hinterland and supporting employment for tour guides, tasting room staff, waiters and kitchen staff in restaurants, guest house and hotel employees, craft sellers and countless other small or informal businesses.

Tourists also come to SA to experience our culture, our world-class food and local entertainment at the historic Vilakazi Street in Soweto or similar sites that are integral to the township economy. There are further strong linkages in agriculture, the services sector and manufacturing. In fact, the alcohol industry supports almost nine jobs across the economy for every one direct job it creates, higher than the SA average of almost eight jobs, translating into R178.7bn in household income in prepandemic times.

Shutting down the alcohol industry, as the government has done four times, affects all of these jobs, not only those directly employed in the liquor industry. Conversely, opening up the alcohol trade along with tourism and hospitality, breathes life back into a large swathe of the economy. This is especially important in the context of the youth unemployment crisis because many jobs, in hospitality and tourism especially, lend themselves to first-time and lower-skilled job seekers.

Our industry is finding new ways to support employment on an even wider scale as part of the rebuilding process. There are recycling projects that generate an income for waste pickers and buyback centres, community safety projects employing patrollers, formalisation of informal businesses to make them more viable and profitable, as well as mixology training and other learnership programmes for those just out of the school system.

There is still a long way back after the devastation of Covid-19. In the wine industry, for example, the 300-million litre surplus created by the first wave of alcohol bans will continue to suppress prices for years to come, driving even more producers out of business and permanently disrupting economies of scale. Some farmers have lost out on a full year’s worth of revenue as they were unable to move existing stock before the next harvest, prompting them to pull up their vines and sell the land.

There is a good chance that SA’s wine output, which is almost a direct exchange for imported spirits in the EU-SA Economic Partnership, will be stunted for good in the aftermath of the lockdowns. The broader liquor industry faces uneven recovery prospects and parts of the alcohol value chain may be wiped out completely.

Many thousands of livelihoods depend on saving what is left of this sector, which has been most battered by Covid-19 sales bans.

• Moore is CEO of the SA Liquor Brand Owners Association.