Source: https://www.capetalk.co.za/articles/399463/bars-have-duty-to-monitor-ris…
The Western Cape Liquor Authority (WCLA) says bars and pubs have the responsibility to act against drunk and disorderly conduct that may lead to Covid-19 non-compliance.
Source: https://risingsunoverport.co.za/92274/alcohol-industry-cuts-off-supplies…
The industry has seen the devastating impact of the ban on the value chain. It has put in place responsible practices and forms of behaviour to trade responsibly to ensure that they protect the livelihoods of many thousands of people across the industry’s value chain.
Source: https://germistoncitynews.co.za/266724/four-arrested-for-selling-liquor-…
Four suspects were arrested for selling liquor without a licence during an operation conducted in Makause, Marathon and Delport informal settlements on October 10.
Source:https://www.iol.co.za/capeargus/news/call-to-amend-western-cape-liquor-a…
Cape Town – People tasked with the provincial Safety Plan have asked the Department of Community Safety to amend the provincial Liquor Act as a part of its plan to halve the murder rate in the province over the next 10 years.
Community Safety MEC Albert Fritz said the amendments were further aligned with Premier Alan Winde’s “smart interventions”, aimed at reducing alcohol-related harm.
“During the lockdown, my department monitored the number of homicides which demonstrated that at the beginning of the lockdown, the murder rate had been halved,” he said.
He said as the country moved into alert levels 4 and 3 the murder figures increased, but then decreased slightly as the ban on alcohol and the curfew were reinstated.
Among the key proposed amendments were altering the Western Cape Liquor Authority’s liquor licence fees, permanently confiscating seized liquor after the payment of an admission of guilt fine, and inserting an objective test within the act to determine whether alcohol has been sold to an unlicensed outlet or individual.
Some included obliging licence holders to take reasonable measures to determine that a client is of legal drinking age and aligning the act with the Liquor Products Act to ensure a uniform definition of “Illicit liquor”.
Fritz said he had noted that between March 27 and August 28, the Western Cape Liquor Authority had conducted 129 investigations into contraventions of the National Disaster Risk Management Act Regulations.
“Of the 129 investigations, 50 section 71 matters were placed on the Liquor Licensing Tribunal’s case roll, of which 40 licences were suspended and 10 applications were dismissed.”
Chief executive of the Beer Association of SA Patricia Pillay said following recent reports of alcohol outlets breaching the level 2 lockdown regulations, the association had committed itself to identifying establishments found breaking the law and cutting off their supply.
Pillay said beer manufacturers would request the details from municipalities and provincial liquor authorities of businesses whose licences had been revoked and would stop supplying alcohol to them.
Source:https://ewn.co.za/2020/08/12/cape-town-restaurants-disappointed-as-alcohol-ban-matter-postponed
The applicants want all eateries with a valid liquor licence to be allowed to serve alcohol for on-site consumption.
CAPE TOWN – A group of Cape Town restaurants set to challenge the national lockdown regulations in court are disappointed that their case will only be heard at the end of the month.
The matter was set down for Tuesday but was postponed for two weeks.
The applicants want all eateries with a valid liquor licence to be allowed to serve alcohol for on-site consumption.
Owner at Chef’s Warehouse Liam Tomlin said the aim of the court application was to prevent a jobs bloodbath and a spate of permanent restaurant closures in South Africa.
“Every single restaurant that has a licence relies on that money; that’s why we have those licences to sell alcohol.”
In court papers, minister Nkosazana Dlamini-Zuma argues alcohol sales are banned to avoid over burdening hospital trauma units and save resources for the fight against COVID-19.
However, the applicants claim there’s no evidence that consumption at licenced restaurants contributes to the problem and the business models of most eateries depend on alcohol sales.
The applicants ask the court to at least allow licenced restaurants in the western cape to sell alcohol.
Last week, the Western Cape government said there was sufficient health capacity to deal with trauma admissions and COVID-19 patients.
In court papers the minister said the regulations were meant to apply generally and protect all South Africans fairly and equally across the country.Back to top
Cooperative Governance and Traditional Affairs Minister Nkosazana Dlamini-Zuma has disputed a claim by a group of restaurants that people are not frequenting restaurants solely because no alcohol can be sold with meals.
She said restaurant groups have not considered that there are risks associated with frequenting public places during the Covid-19 pandemic.
In her 103-page affidavit submitted to the Western Cape High Court, opposing the application led by Cape Town-based Chefs Warehouse restaurants, Dlamini-Zuma said the restriction on on-site consumption of alcohol was rational and lawful.
“It is denied that the eating-out experience would ‘be so absurd and unpleasant that nobody would actually want to do it’. The statement assumes, as a fact, that all people that frequent restaurants consume alcohol or go out for the alcohol, not the food,” Dlamini-Zuma said.
She said it was patronising for the group of restaurants to assume that everyone who visits restaurants wants alcohol, given that only 31% of people in the country consume alcohol.
“I do not dispute that a number of people do enjoy alcohol with meals in normal circumstances, but we are not living in normal circumstances. There are unprecedented times, which require all South Africans to adapt until we overcome Covid-19,” she told the court.
Temporary measure
Dlamini-Zuma reiterated the argument she made in other court challenges against the alcohol ban: That the prohibition on the sale of alcohol was taken as a temporary measure – until the rate of infections slows down.
“There is no desire on the part of government to leave this prohibition in place for longer than it is regarded as necessary,” she said.
The group has asked the court for an order that “all restaurants in possession of a valid liquor licence” should be allowed to serve alcohol with meals to their patrons on-site. This would be subject to the conditions of their liquor licence and all other applicable laws, they said.
The group is also contesting the physical distancing regulations.
It says the requirement to have 1.5m between all patrons should “exclude patrons voluntarily deciding to sit at the same table, sharing it”.
Dlamini-Zuma, however, said physical distancing remains the basic tool used to reduce the spread of the Covid-19 virus.
Restaurants also argued that they should be allowed to sell wine and beer, with the prohibition only for hard liquor.
Dlamini-Zuma said the government did consider imposing less restrictive measures.
“Making allowance for the sale of specific types of liquor, such as wines and spirits, even if this was implementable, in identified industries, would not provide the effective relief on the healthcare system that is required at a time of a huge surge in Covid-19 cases.
“The fact is that such a measure would be difficult to enforce.”
In response to the arguments of the economic consequences of the alcohol ban, Dlamini-Zuma said the government will re-evaluate the ban regularly “to also limit hardships facing the economy and individual livelihoods during this period”. Back to top
A sequence of hard commercial decisions by small, independent liquor stores around South Africa, and their landlords, is about to create a regulatory nightmare that will outlast the coronavirus crisis, liquor traders are warning.
If they’re right, the result will be a mass closing down of legal bottle stores, especially in the more far-flung parts of South Africa. Then, when alcohol retail becomes legal again, those bottle stores will be replaced by unlicensed shebeens operating outside of the tax net, and without regard for rules intended to curb alcohol abuse over the long term.
<
Bottle stores are currently trying to figure out if they can (and should) pay their rent, say people in the industry, while not knowing when they may be allowed to sell again, and for how long prohibition will be lifted this time around.
The calculation is a complex one, and unique to each small business. Should staff be paid first, in part or in full? How much capital will be required to start from scratch, and is it better to hoard available cash to do so? How much stock is about to reach its sell-by date, and is it better to leave that for liquidators to worry about, if it comes to that? Will landlords be sympathetic?
But with every day of lost trade and ongoing uncertainty, more and more stores are failing to pay their rent.
Even sympathetic landlords can’t just let that slide, traders say; they are following their rights, which end in selling off stock and shop fittings to recover what is owed, and clearing out space for new tenants, if any can be found.
Before that comes invalidating leases for non-payment, which is where regulations come in. Liquor store licences are tethered to specific premises for reasons that include keeping them away from schools. An invalid lease means an invalid liquor licence, which at the very least will require a lot of paperwork to sort out.
Though they won’t say so on the record, for fear of making things even harder, bottle store owners are darkly amused at the idea that provincial governments (which control retail licences) will be able to process such paperwork expeditiously.
They also won’t talk directly about what owners and workers are likely to do in such circumstances, but the unspoken expectation is clear enough: the legal trade will simply become an illegal one, with a flourishing of unlicensed shebeens.
Operating outside the law has its commercial attractions, notably not paying tax. It also comes with disadvantages that include not having access to formal finance for expansion, and the threat of losing everything in a raid.
In 2020, one trade points out, booze merchants have learnt that they could lose everything anyway, through what they see as capricious government action.
Perhaps staying outside the law is simpler after all.
On 12 July President Cyril Ramaphosa announced the reinstatement of the ban on the sale, dispensing and distribution of liquor with immediate effect.
This was further codified by Regulation 44(1) of the Disaster Management Act 57 of 2002 which provides that the sale, dispensing and distribution of liquor is prohibited.
In addition to catching many South Africans by surprise, the announcement has had a major effect on retailers as liquor contributes a significant amount to sales, says law firm Cliffe Dekker Hofmeyr.
In an analysis of the announcement and the accompanying regulation, the firm noted that there are possible routes for this ban on the sale of alcohol to be challenged in court.
“Regulation 44(1) of the Act can potentially be constitutionally challenged as it infringes on the section 22 constitutional right to freedom of trade, the section 10 right to human dignity and the section 14 right to privacy, ” it said.
“The state must prove that the alcohol ban is a reasonable and justifiable limitation of these rights.”
<
While it has been noted that the number of alcohol-related hospital admissions had increased at an exponential rate once the alcohol ban was lifted, there are less restrictive means to achieving the purpose of ensuring that hospitals have enough resources to assist Covid-19 patients, the firm said.
“This includes allowing for the sale of liquor only on certain days of the week or limiting the amount of alcohol a customer is able to purchase.
“These less restrictive means could limit alcohol consumption and therefore reduce the amount of alcohol-related hospital admissions.”
< <
Knock-on impact of the ban
Cliffe Dekker Hofmeyr also drew specific attention to retailers which provide a ‘three-in-one service’. These are your stores which have a general merchandise, food and liquor department.
“Alcohol sales contribute on average about 20% towards a stores’ turnover. This 20% sets the store behind in meeting their budgets set for the year,” said Cliffe Dekker Hofmeyr.
“It also results in extra pressure being put on employees in the other departments to make sales during a pandemic as well as in our already struggling economy.
“Retailers which provide a three-in-one service have had to place staff that would usually work in the liquor store, into a different area in the business to ensure that they are still able to work and earn a salary.
“This requires a great amount of planning and results in a store having staff working in a department in which they do not have the expertise in.”
Suppliers
Cliffe Dekker Hofmeyr noted that suppliers and retailers are also sitting with short-dated stock.
This stock will ultimately either end up not being able to be sold anymore which means further losses for the retailer or the stock is discounted for half price by the supplier or becomes a company expense which ultimately results in loss of profits for the retailer, it said.
“Most retailers have a 90-day payment plan with their creditors. The alcohol ban inevitably results in the retailer having to renegotiate their payment plans with parties such as South African Breweries and Distell.
“This requires extensive planning and negotiating. This is just one of the instances that demonstrate how all parties in the liquor value chain are affected by the alcohol ban.”
Other additional costs incurred by the ban include:
“The previous unbanning of the sale of liquor helped retailers get back to their original budget plan in terms of profits but the reinstatement of the liquor ban has once again placed these stores in a position where they are not able to successfully meet these budgets.
“There is a lot of uncertainty and retailers have had to plan, adjust and be proactive during this time,” Cliffe Dekker Hofmeyr said.
The firm noted that while larger retailers are able to place staff who usually work in the liquor store in a different department, smaller retailers and taverners are not able to do this and are experiencing the full effect of the alcohol ban.
These smaller retailers and taverners remain closed, are not able to generate an income and this results in further job losses for their employees.
“This would not be the case if the alcohol ban was lifted seeing as the smaller retailers and taverners contribute a significant amount of sales to the alcohol industry.
“One can argue that retrenchments, job losses and stores not meeting their budget plan would occur regardless of the alcohol ban, but the full effect of the alcohol ban is yet to be seen.”
Financial impact
Speaking to 702 on Wednesday (22 July), SARS commissioner Edward Kieswetter said that the decision to ban alcohol and cigarettes has had a material impact on tax collection.
While he said he couldn’t go into detail around the valuation of the prohibition, SARS has seen a 51% decrease in excise collections in the current financial year, the equivalent of some R18 billion.
Of this, cigarette and alcohol sales make up a significant portion, he said.
The bigger problem, Kieswetter said, were the implications further down the line. If sales come to a complete stop over a longer period, the industry will face more job losses and the closure of smaller businesses and farms.
Commentary by Nick Muller (executive consultant) and Kirsten Felix (candidate attorney) at law firm Cliffe Dekker Hofmeyr.
The alcohol industry was afforded a deferment on payments due in May and June for a period of 90 days for excise compliant businesses.
The outrage on government’s decision to impose ban on the sale and distribution continues as various liquor associations called on Minister of Finance Tito Mboweni to extend the payment of excise duties period with an additional 90 days.
In a joint statement, the South African Liquor Brand Owners Association, Beer Association of South Africa and VinPro, said they were hoping that Mboweni and the South African Revenue Service (Sars) would grant its industry permission on the matter.
“It is within that context that we address this letter to your office to request that you urgently consider issuing a further directive to further extend the deferment period for the payment of excise duties for an additional 90 days,” said the associations on Friday.
This comes after, the alcohol industry was afforded a deferment on payments due in May 2020 and June 2020 for a period of 90-days for excise compliant businesses, which was included in the tax measures issued by government in April.
READ MORE: Liquor traders demand more than R680m in relief funds for taverns, shebeens
The associations said that the current market conditions made it difficult for members to secure short term funding, while the majority of the companies in the industry did not qualify for the other government relief measures offered.
“In order to enable business continuity, to ensure the well-being of staff and to pay suppliers, we therefore urgently request your assistance.”
They emphasised that the alcohol industry would experience severe short-term liquidity restrictions if the extension was not granted.
“This will limit our ability to pay our employees and various suppliers and place us at risk of breaching our financial covenants.”
Excise Payable explained:
The associations said their members manufacture various alcoholic beverages, which formed part of the point of sale (POS) and duty at source (DAS) regulations.
The ciders, beer and vermouth, which are DAS products, become duty paid when the stock is removed from the manufacturing warehouse to various distribution centres, where it is stored until such time as it is sold according to the associations.
“Our spirit products are DAS products, where excise is paid as part of the manufacturing process and the products become duty paid by the time it is a finished product.
“In both these cases, alcohol players solely bear the excise burden until such time as the products are on-sold despite the fact that excise is in principle a consumption tax and therefore a tax on the consumer.”
Liquor licences:
In other news, liquor licence holders demanded that the government pay back the money they paid for their licences.
The licence holders argued that they paid good money upfront for licences, but with the ban they cannot use them to earn an income.
“Money shouldn’t be a problem for the government. After all, they lose billions from liquor; and cigarettes taxes go to the black market. Licence holders are saying it’s payback time,” they said.
The licence holders also complained about the liquor that expired in their stores because they could not sell it due to the restrictions.Back to top
Source: https://citizen.co.za/business/2324529/liquor-traders-call-on-government-to-pay-back-licence-fees/
According to LiquorWise, a well-known restaurant in the Western Cape lost R1 million due to liquor expiring in kegs.
President Cyril Ramaphosa’s move to reimpose the ban on the sale of liquor has sparked a backlash as liquor licence holders now demand that the government pay back the money they paid for their licences.
The call has added to the liquor industry’s outcry over their suffering under the ban and that they were contemplating retrenching hundreds of thousands of employees.
Restaurant Association of South Africa CEO Wendy Alberts described the ban as “diabolic” and a “complete fiasco” and said members would have no choice but to retrench workers.
Separately, the licence holders yesterday said they paid good money upfront for licences but now, with the ban, they cannot use them to earn an income.
“Money shouldn’t be a problem for the government. After all, they lose billions from liquor; and cigarettes taxes go to the black market. Licence holders are saying – it’s payback time,” they said.
Last week, the licence holders complained about the liquor that expired in their stores because they could not sell it due to the restrictions.
According to LiquorWise, who are liquor licence specialists, a well-known restaurant in the Western Cape lost R1 million due to liquor expiring in kegs. “And he’s not alone. Many other restaurants are in the same dire situation.”
Despite the liquor having expired, they still had to pay suppliers. The situation has been worsened by insurance companies that refuse to pay out for the alcohol.
“Every day, more restaurants are proverbially drowning in their blood, being forced to commit commercial suicide,” LiquorWise said.
“Let’s support those many brave restaurateurs who are still fighting to survive and are keeping many thousands in a job.”Back to top
