South African Breweries Cancels Billions More In Investment
South African Breweries Cancels Billions More In Investment Due To Alcohol Ban! The South African Breweries (SAB) has cancelled a further R2.5 billion of investment which was designated for 2021.
This cancellation follows from the third local ban on the sale of alcohol. President Cyril Ramphosa announced that the country would be heading back to lockdown level 3 in December 2020. The level 3 lockdown comes with stricter regulations such as the ban on the sale and transportation of alcohol.
SAB’s cancelled investments in South Africa relating to the alcohol ban now totals R5 billion. In August 2020, the maker of Carling Black Label and Castle Lager beer cancelled R2.5 billion of planned expenditure following a second alcohol ban. The cancelled investments were for upgrades for their operation facilities, product innovation, operating systems as well as the installation of new equipment at selected plants.
The ban of alcohol sales is part of the efforts to ease the burden on hospitals and health workers for them to deal with Covid-19 patients instead of alcohol related injuries.
The ban resulted in more than 165 000 people in South Africa losing their jobs and about 30% of local breweries have been forced to shut their doors permanently. SAB’s Vice President of Finance, Richard Rivett-Carnac said in a statement, “Given the material impact that this third ban on the sale of alcohol has on our business and the possibility of further bans, we have no choice but to halt these investments for the foreseeable future.”
“This decision will impact on the profitability of and number of jobs created by the companies that would have worked with SAB to execute the capital investment plans.” Rivett-Carnac added.
SAB is currently in court challenging the government’s decision to re-impose the ban of the sale and transportation of alcohol.
