EDITORIAL: Alcohol industry needs a more predictable Covid-19 strategy from government
When it comes to President Cyril Ramaphosa’s Covid-19 updates, one industry is always more nervous than most.
From brewers such as SA Breweries and Heineken to retailers such as Massmart and Pick n Pay, executives listen to the speeches not knowing if key parts of their business will be allowed to trade the next day, or failing that, what kind of restrictions they will be subjected to.
It’s a layer of uncertainty no industry should have to deal with, especially with no prospect of compensation from the government to soften the blow. The time has come for the government to have a more predictable regime as this ongoing uncertainty isn’t compatible with increasing investment and boosting employment.
There will have been considerable relief that Ramaphosa refrained from an outright ban on alcohol sales this week. The president prudently went against the advice of the government’s scientific advisers, acknowledging the need to protect livelihoods, the economy and lives. Supermarkets and other businesses selling alcohol for consumption at home will only be allowed to do so from Monday to Thursday.
On the one hand, it makes sense to impose restrictions on alcohol sales, especially considering that the third wave of the pandemic looks set to be worse than the second one, which proved far more brutal than the first. The industry has done its own studies disputing this, but there is no independent study that convincingly refutes the argument that alcohol is a major factor in taking up hospital beds.
Had the president fully heeded the scientific advice, he would probably have freed up more beds. A telling statistic came during the second wave late in 2020, when Chris Hani Baragwanath Hospital in Johannesburg went through a New Year’s Eve without a single patient in its trauma unit.
But on the other hand, consumer spending — which is among the sectors that helped the economy record above-expected economic growth in the first quarter — would have been choked off and the livelihoods of tens of thousands would have been destroyed in an economy with unemployment at record levels.
In earlier lockdowns, the government provided a soft landing for workers ordered to stay at home and businesses cut off from consumers. The Unemployment Insurance Fund came to the party with insurance payments that helped people put food on the table and allowed businesses to retain talent.
The same scale of support is not possible now, leaving Ramaphosa to strike a balance that should leave everyone less disgruntled, including foreign investors such as Heineken, which has approached Distell about buying a controlling stake.
Of course, there’s a good chance we would not be here had the government moved faster in securing vaccines, and, once we did, rolled out the programme as fast as our emerging market peers have done, at the very least. Less than 2-million people have been fully or partially inoculated, far from reaching the herd immunity target forecast for the first quarter of 2021.
It’s true the rollout was hampered by factors beyond anyone’s control, including production problems at a US plant that makes ingredients for the Johnson & Johnson jabs touted as the backbone of SA’s mass immunisation programme. But the government cannot escape blame for dragging its feet to secure supplies in 2020, even if health officials were telling South Africans vaccines were no silver bullet.
While this week’s decision to introduce tighter restrictions is pragmatic, getting as many people as possible inoculated as soon as possible is our best hope against a damaging cycle of illness, death and lockdowns.
As we get towards that goal of herd immunity, the hope is that the cycle of infection waves and ever tighter restrictions will be broken. In the meantime, the government has to find a way to enable one of the key sectors in the economy — the wine industry alone contributes about R38bn to the fiscus and supports 350,000 jobs — to operate with a greater degree of certainty.
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