EDITORIAL: Prohibition of alcohol sales dries out the economy
The alcohol industry – through sales of wine, beer and spirits; employment; tourism; and export earnings – provides important support for SA’s economy
In many ways, it’s understandable that police minister Bheki Cele is virulently opposed to the demon drink. Alcohol abuse is, after all, the common factor in many of SA’s worst crimes: — murder, rape, assault, domestic and sexual abuse. And there is plenty of anecdotal evidence that since the SA’s 21-day lockdown began, the weekend casualty ward burden has eased, cases that are common in hospitals over weekends have fallen, largely thanks to the ban on the sale of alcohol.
"My first prize would be that we shut down alcohol, but I know we cannot do that," Cele said last week, referring to a continuation of the alcohol ban, post the 21-day lockdown. For the sake of Cele’s own government, if nothing else, they most certainly can’t.
The alcohol industry — through sales of wine, beer and spirits; employment; tourism; and export earnings — provides important support for SA’s economy. Grape and wine production contributes about R49bn to GDP, while the industry, at last count, directly and indirectly employed 300,000 people. And, unlike many other parts of local industry, the sector’s contribution to the national GDP has been growing at least 10% a year since 2003 — which makes it one of the best-performing players in an otherwise struggling economy.
You’ll also know that alcoholic beverages fuel two of SA’s finest companies on the JSE — Distell and AB InBev. These companies bring in billions in hard currency every year thanks to the sale of their world-class products. And they pay heaps to the fiscus.
SA, in fact, ranks among the nine biggest wine-producing nations in the world, and in 2018, according to figures compiled by Wines of SA, 51% of wine produced in SA was exported.
In other words, it’s an industry critical to the trade balance and, by extension, the stability of the rand.
And the rand has been anything but stable in recent days, plunging through R19/$ after Fitch and Moody’s downgraded the country’s credit rating. And yet, just a few weeks ago, it was close to R14/$.
Of course, another major factor in the rand’s slide has been the coronavirus-inspired rush from emerging-market currencies into dollars. But the fact that SA’s wine industry has been prevented from selling its products abroad will surely have contributed.
It is for this reason that changes to transport regulations published on Tuesday evening — finally allowing wine that is export-ready to be transported to ports, is such a crucial win for the lobby that pushed for it.
Clearly, the province that reaps the biggest economic benefits of SA’s wine and grape industry is the DA-run Western Cape. Already, the premier, Alan Winde, has butted heads with Cele over the hastily gazetted lockdown laws on cigarettes, allowing some shops in the province to continue selling them.
"The Western Cape is part of SA and this is a national law. Everybody should respect a national law," Cele thundered in response.
It is natural for the ANC to portray the Western Cape as an upstart "super-province", but the economic benefits of lifting the ban on wine exports will accrue to the country as a whole — and not just through tax revenue.
Obviously, we need a lockdown to defeat Covid-19, but pig-headed rules imposed for their own sake, without nuance, do SA a disservice.
Cele’s underlying antipathy is manifest in other ways too — such as, ironically, in the under-resourcing of the police service in Cape Town’s gang-ridden suburbs. But if the call is for national solidarity during these unprecedented times, petty political squabbles must also be set aside.