BUSINESS NEWS - South African Breweries (SAB) will no longer be investing R2.5 billion in its annual capital and infrastructure upgrade programme this year.
The brewer said this is a consequence of the Covid-19 lockdown-induced ban on liquor sales for the past 12 weeks. It has effectively lost 30% of its annual production.
More than a million livelihoods affected
SAB vice president of finance Andrew Murray says the company has been hard-hit by the lockdown and its stringent regulation on the sale of alcohol.
“This decision is a result of the first, and current, suspension of alcohol sales which has led to significant operating uncertainty for ourselves, our partners, as well as colleagues in the industry, including participants in the entire value chain, and which impacts over one million livelihoods across the country.”
Initially, it had intended to invest R5-billion over the next two years. The R2.5-million planned expenditure for the next financial year remains under review.
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The investments that were being considered included upgrades to operating facilities and systems, as well as the installation of new equipment at selected plants.
“This decision will also have an impact on the external supply chain companies that had been selected for these upgrades,” SAB says.
It forecasts that the jobs lost across the entire industry as a result of the alcohol ban will soon reach 120,000, while the excise tax lost from the first ban is sitting at over R12-billion.
“The jobs and financial losses magnify considerably when considering the severe impact the suspension is having on communities, as well as the downstream supply chain, including farmers and other raw material suppliers, tavern owners, packaging and logistics companies, among many others that have had to immediately stop operations and are facing dire consequences,” it states.
