from NJABULO BUTHELEZI in Durban
DURBAN, (CAJ News) – DISTELL, the multinational brewing and beverage company, has lost a combined R130 million (US$8,8 million) because of recent civil unrest and prohibition on alcohol in South Africa.
One of its distribution centres in KwaZulu-Natal was damaged while operations disrupted, with initial assessments placed the damage at approximately R100 million.
Distell estimates that 332 of its customers have been adversely affected by looting during the recent unrest.
The company disclosed the alcohol restrictions in the current adjusted Level 4 lockdown resulted in operating profit being negatively impacted by about R30 million (9,8 cents per share after tax).
This is since June 27 when President Cyri Ramaphosa announced the prohibition on the sale and distribution of alcohol.
Distell denounced the ban as “unjustifiable.”
The firm said the industry has repeatedly warned and demonstrated via research that bans fuel illegal activity, particularly amongst crime syndicates who are significantly strengthened during prohibition.
“It is becoming increasingly difficult to reverse this as syndicates become entrenched,” Distell stated.
Recent research, according to the company, shows that bans on alcohol sales have increased and fueled the illicit trade, reaching 22 percent of total market volumes in South Africa, worth R20,5 billion in sales value.
This has cost the fiscus R11,3 billion in tax revenues.
– CAJ News