By Zwelethu Dlamini | 2020-10-18
The Eswatini Beverages is believed to have made losses amounting to over E300 million since government effected the lockdown and the ban on the sale of alcohol.
This is calculated based on the assertion by the Minister of Finance Neal Rijkenberg, suggesting that the liquor sector has in the past six months or so lost about E400 million.
Since Eswatini Beverages contributes over 70 per cent in the market sector, it is believed that this amounts to over E300 million.
The percentage of the loss of revenue was confirmed by Eswatini Beverages Head of Legal and Corporate Affairs Mpumelelo Makhubu in an interview on Thursday. “I think it suffices to say in the past eight months, we have lost about 60 per cent of our revenue,” he said.
When told that the minister had indicated that the sector had lost about E400 million since the lockdown, Makhubu said such did not only refer to Eswatini Beverages as there are other players in the sector who held a certain market share.
“I think you can extrapolate that we only account for over 70 per cent of the market and the others take the remaining 30 per cent,” he said.
Despite lifting the ban effective on October 26, 2020 the loss in the sector is expected to increase as the hundreds of liquor traders are said to have closed business due to the prolonged alcohol ban.
Furthermore, the Liquor Association has stated that the operating hours and days that government had put in place as conditions of lifting the ban were also less likely to make meaningful contribution in reviving the sector as they were not favourable to their customers.
The association added that they also needed guarantees that government will not close the sector after opening for a few weeks, as such could lead to losses as they would have borrowed money to buy stock and will not have recovered it by then.
Since government announced the alcohol ban, the Eswatini Beverages had been in the forefront warning on the negative impact in the sector. Similarly, Business Eswatini had been expressing its concern over the same matter persuading government to lift the ban as this opened the industry to the black market, while tax- paying companies suffered.
Business Eswatini CEO E. Nathi Dlamini last month disclosed that Eswatini Beverages was under immense pressure from their group head office to come up with commercially sensible reasons why they should continue to invest in the country.
Dlamini said the reasoning from AB InBev was that they could still supply the country from any of their footprints in Africa, and they did not need to necessarily manufacture in Eswatini.
“That’s exactly what we do not want. As Business Eswatini, we feel relocating a processing plant to another country is not in the best interest of our country. Furthermore, we all know that should this relocation happen, there will be serious job losses.
Everyone knows that this company offers high quality jobs from scientists to lab technicians. These are high quality jobs which we don’t want to ever lose,” emphasised the CEO.
The CEO also revealed that he held what he described as frank discussions with his counterpart at Eswatini Beverages, Bridget Makhura, who took over as managing director six months ago.
He said their concern was based on the fact that Eswatini Beverages is part of the Business Eswatini stable. Dlamini said they both decried the unrestricted flow of alcohol and spirits into the country, yet the ban on alcohol was still in effect.
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