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South African Breweries (SAB) says the ripple effect of South Africa’s third alcohol ban is being felt throughout its beer value chain, and that it is nearing its maximum storage capacity at its nine brewing facilities.
The company said in a statement on Monday (25 January), that it will continue to reduce production levels, as it navigates the unintended consequences of the prohibition.
The lack of trade coupled with reduced storage capacity has led to a slowing down of production, along with the uncertainty of the duration of the alcohol ban, has resulted in the decision to suspend 550 temporary contract workers across its South African operations.
These temporary contracts will predominantly affect positions within SAB’s supply and logistics workforce, it said.
"The third alcohol ban has resulted in a reduced demand for the temporary workers skills, this is no fault of their own but rather a result of the current operating environment," said Zoleka Lisa, vice president of Corporate Affairs at SAB.
"We realise the impact this decision will have on the 550 families who will sadly have to go without because of the reduction of production levels due to the suspension of sales."
With SAB competitors like Heineken already retrenching parts of its South African workforce, Lisa said that the company is doing everything in its power to avoid this outcome despite having to navigate an uncertain regulatory and policy environment.
We are reviewing all measures available to us, but with minimal communication and engagement from government on timelines for the ban, this has made business planning, and the consequential impact, extremely difficult.
"Together with the broader industry we will continue in our attempts to engage government, ultimately to arrive at collaborative resolutions for a better sustainable future, which balances lives and livelihoods alike, "said Lisa.
She added that the scale at which SAB’s value chain is being impacted by the ban is deeply concerning.
"We have already cut overall staff salaries by 10%. We have already cancelled R5 billion in investments. We have reduced as much discretionary spend as possible, in order to deal with the uncertainty of subsequent bans and changes in regulations."
With costs mounting, SAB called on the government to engage with the industry and all social partners in an attempt to 'achieve greater responsibility in decision making'.
"This has to be a truly collaborative effort on all fronts so that we can all work together as partners in our fight against the pandemic.
"SAB remains committed to supporting the nation’s fight and we are determined to play our part in ensuring that we continue to contribute positively to our country’s economic recovery and stability. But we strongly believe that a more balanced approach would be better in the long run," Lisa said.