Alcohol sales ban a huge blow to industry hard hit by Covid-19 lockdowns

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President Cyril Ramaphosa moved SA to its highest level of the lockdown since the early days of the Covid-19 pandemic, prohibiting the sale of alcohol and outlawing all gatherings as he warned that the latest wave of infections would be more severe and may last longer than previous ones.

“We are in the grip of a devastating wave,” Ramaphosa said in an address to the nation on Sunday, moving the country to level 4, the second most severe lockdown level. The night-time curfew was made an hour longer and will now start at 9pm and last until 4am. Funerals will still be permitted, with the numbers restricted to 50 people. The new restrictions will be reviewed after two weeks, Ramaphosa said.

There are additional restrictions for Gauteng, which accounts for about a quarter of the population and has been at the centre of the current wave, leaving its hospitals stretched.

Coming a day after one of the government’s top scientific advisers, Prof Koleka Mlisana, the head of the ministerial advisory committee on Covid, had called for a “very decisive” reaction, saying there should be “no gatherings whatsoever”, the new restrictions were widely expected, even if they come as a blow to industry.

Government’s failure to procure vaccines quickly enough, which left SA exposed to a new wave of infections into the third quarter, was identified by economists as one of the biggest risks to an economy that shrunk in 2020 by the most in a century and lost more than 1-million jobs. The latest data showed SA’s official unemployment rate climbing to a record 32.6% in the first quarter of 2021.

With the government’s fiscal position too stretched to provide relief to companies and individuals, business had urged the government to maintain a pragmatic approach to lockdowns.

The decision to ban alcohol sales across the country, despite the crisis being concentrated mostly in Gauteng, is a huge blow for an industry that estimated lost sales in the previous three bans at R36bn, while the prohibitions also entrenched an illicit market, depriving the state of billions of rand in revenue.

Gauteng was hit with travel restrictions, with the ban on leisure travel to and out of the province dealing another blow to SA’s battered tourism market and airlines, which were barely recovering from the devastation of the 2020 lockdown that closed travel between provinces and pushed Comair into business rescue, while it accelerated the demise of SAA. Johannesburg to Cape Town is the busiest domestic airline route.

Just this month, the government agreed to sell a majority stake in the national airline.

The service industry will again be hard hit with on-site consumption of food also not allowed. During the second wave in December, restaurants were allowed to trade, but they were still left devastated by the ban on alcohol sales.

Ramaphosa said light restrictions imposed about two weeks ago meant that “appropriate and proportionate additional restrictions are necessary for the next two weeks”. As with previous prohibitions, he said the alcohol sales ban was necessary to soften the demand on trauma units in hospital.

He said people had eased up in following health protocols and “the reality is that complacency has come at a high price”.

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