Swazi Observer

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ESWATINI BEVERAGES ONLY BRANCH SUFFERING

By KWANELE DHLADHLA | 2020-09-17

In the wake of news reports suggesting that Eswatini Beverages alcohol plant could be shut down, it has emerged that the local company is the only subsidiary of AB InBev in the whole world which is not allowed to operate.

All subsidiaries of the company in the region and everywhere it is business as usual, except in Eswatini, where the manufacture and distribution of alcohol remains banned as part of measures to contain the spread of the coronavirus (COVID-19).

AB InBev, which acquired the SABMiller controlling stake in Eswatini Beverages in 2016, employs approximately 150 000 people across 24 countries worldwide where it strives to be the best beer company bringing people together for a better world. In its 2019 annual report, the company mentioned that its African operations include South Africa, Nigeria, Uganda, Eswatini, Namibia, Botswana, Ethiopia, Ghana, Kenya, Lesotho, Malawi, Mozambique, South Sudan, Tanzania, Uganda, Zambia and Zimbabwe.

Despite being the only closed branch in the world where AB InBev operates in the region, the business community has expressed a great concern that the Eswatini alcohol plant could be closed down because the local operation in Matsapha is one of the smallest subsidiary operations under the group.

Business Eswatini Chief Executive Officer (CEO) E.Nathi Dlamini, who has vast experience in running large corporations, pointed out that when subsidiaries are too small like Eswatini Beverages, their revenue contributions to the group are insignificant, they are always at risk of being chopped off should uncertainties ‘as the ones we have created for ourselves here arise’.

“An unpredictable environment is bad for business. This lockdown on alcohol, which has become inconsequential in terms of curbing the spread of the virus because there is too much liquor coming through anyway, means that we are placing this patriotic investor in a precarious position, which is totally unjustifiable,” Dlamini noted.

Closing

Dlamini said the risk of closing down was now imminent. He forecasted that should the plant shut-down proceed as planned, this would mean that Eswatini would have to import alcohol henceforth.

“This also means that we will have to use foreign currency to buy that alcohol, which foreign currency we have little of; it further means our current balance will worsen as we import more than we export; most importantly though, it means quality jobs, estimated to be more than 200 people, will be lost probably forever; supply linkages with small companies associated with the manufacturing plant will have to shut down too, thereby retarding our national efforts to nurse a manufacturing sector linked to our small business sector; the damage to be done to this country is almost too huge as to be calculable,” said Dlamini.

Further rubbing salt onto the already gashing wound were claims to the effect that government has lost up to E100 million in taxes.

“This country makes nothing from boot-legged alcohol. Absolutely nothing. Over and above that, Eswatini loses revenue in the form of taxes, which is estimated to be close to E100 million thus far,” Dlamini disclosed.

He added that not only has government lost tax revenue, but the duties going to the Southern African Customs Union (SACU) were also ebbing dramatically, which could have ugly consequences on SACU receipts for the country.

“We are fast-approaching a scenario where even maintaining the civil service payroll will be impossible if we keep losing revenue at this rate,” Dlamini lamented.

He pointed out that at a time when the advice we have received as a country was to limit the over-reliance on SACU revenue, which was unpredictable to a certain degree, we are facing a problem whereby we cannot say is not of our own making,” said Dlamini.

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