An open letter to Cyril Ramaphosa from retail CEOs

Dear Mr President,

This open letter brings together many of South Africa’s most significant manufacturers and retailers of food and other essential products, such as quick service restaurants and medicines.

We take our responsibility to feed and sustain the nation very seriously. We work tirelessly, night and day, to produce food and household products, secure health-care products, and to ensure they are always available in our stores when customers need them.

The consumer goods industry’s contribution to GDP is significant and it is the country’s largest employer. Millions of people depend on us for their livelihoods.

We are alarmed and dismayed by the levels of load-shedding which we have all had to endure over the past decade, and which have escalated catastrophically in recent months.

While we have maintained our operations and supply chains so far by using emergency power generators, this has been at an unsustainable financial cost. It is crippling our businesses, and will in the end mean much higher prices for consumers, who are already under severe financial strain.

The deterioration of other essential infrastructure — including water, roads, rail, and policing — makes our tasks, and those of thousands of other businesses around the country, even more difficult.

If this crisis continues, we will not be able to guarantee stable supplies of food, medicines and other essential goods. The government needs to understand this, rather than believe we can maintain business as usual.

We require urgent and decisive action from the government to solve the crisis, and specific steps to ensure that the consumer goods industry can fulfil its role as an essential service for every family in the country.

These steps must include:

• Rapid implementation of the plans already in place to solve the overall energy crisis;
• The removal of regulatory red tape and escalating indirect taxes such as the health promotion levy to enable investment and business sustainability;
• Address the deterioration of essential infrastructure such as water, roads, rail, and policing;
• A suspension of the fuel duty levy and Road Accident Fund levy for the consumer goods businesses and value chain, for as long as we suffer regular load-shedding. This is a critical sector that should be considered for fuel rebates similar to the mining, agriculture, fisheries and forestry sectors;
• Effective tax and other incentives to install localised renewable energy at small and medium scale;
• Action to ensure that critical infrastructure, such as essential food production, medicines and distribution facilities, is not only exempted from load-shedding but is prioritised on the safety and security list; and
• Accelerate the fight against illicit trade across the economy as it reduces the tax base and deprives the government of crucial revenue at this critical time.

We look forward to hearing your plans for action in the 2023 state of the nation address, giving due consideration to the proposals put forward in this letter by the CEOs who are signatories.

We will continue to work tirelessly to sustain our customers and communities.

We will support the government where we can and ask urgently for decisive action from you.

Signed:

Gareth Ackerman
Co-Chair

Johann Vorster
Co-Chair

Zinhle Tyikwe
CEO

Issued on behalf of the following industry CEOs:

BAT East and Southern Africa

Bidfood

Massmart

Famous Brands

Exclusive Books

Magalies Citrus

Mars

Burger King

Coca-Cola

Tiger Brands

Pick n Pay Retailers (Pty) Ltd

Shoprite

PepsiCo

OBC