In the wake of the pandemic, as well as the re-introduction of the ban on alcohol sales, South Africa is seeing the hospitality industry clutching onto its last inch of life.
As the various industries and businesses which cater to this sector face overwhelming odds in the midst of the COVID-19 storm, enormous companies are falling victim to the declining economy and outlandish decisions made by Government. This follows Heineken South African being forced to shut down its production, entirely.
Furthermore, the age-old, beer giant’s proposed a R6-billion production facility, which was earmarked to be situated at the Inyaninga Site near Dube TradePort, Durban, has come to a grinding halt.
The production facility was expected to provide a substantial financial boost for the region, creating approximately 400 permanent new jobs, while establishing further service-related employment opportunities.
According to Heineken, operating profit (BEIA – Before Exceptional Items and Amortization) declined 52.5% organically, with lower profit in all regions.
Furthermore, Heineken says operating profit declined by 94.8%. 84% of the organic operating profit decline was driven by Europe, Mexico and South Africa. The operational deleverage was amplified by the volume decline in the on-trade in Europe.
In South Africa, Heineken adds the total volume declined in the 40% range, due to the ban on the sale, distribution, and production of alcohol from late March to end of May.
Heineken’s brand portfolio includes Heineken, Sol, Amstel, Windhoek, Miller’s Genuine Draft, Soweto Gold, Tafel and Strongbow.
One can clearly denote that round two of the alcohol ban will surely lead to mass challenges and shutdowns for industry-leading deities such as Heineken and SAB, if drastic steps are not taken.
As the ban on alcohol sales continues in South Africa, Zoleka Lisa, Vice President of Corporate Affairs at SAB, explains the ban on alcohol sales resulted in the alcohol industry value chain losing an astounding 117 000 jobs during the last ban.
Furthermore, Lisa explains the latest, abrupt ban on alcohol puts a further staggering, 1 million jobs at risk across the industry’s value chain.
With the lives of millions of people being affected by the ban on alcohol sales, seeing many prepare to lose their source of income, along with beer giants beginning to shut down production, it seems COVID-19 regulations are doing more damage than good and at this rate will cost us all far much more than the virus could hope to achieve.
Time is ticking and like a cheesy 90’s action movie, the red or blue wire needs to be cut, before the bomb destroys everything. The problem is, it seems as though Government is not even acknowledging that a bomb exists, let alone the reality it needs to be defused.
