COSATU calls on government and the liquor industry to open dialogue and find a compromise to resolve the impasse over the alcohol ban in order to save jobs

26 January 2021

The Congress of South African Trade Unions is deeply concerned about South African Breweries (SAB) decision to suspend the contracts of 550 temporary workers. This is going to leave hundreds of families struggling to put food on the table and we call on the company to rethink and reverse this unfortunate decision.

It is worse that these 550 workers were not only temporary workers and potentially exceeding the three months’ legal limit on temporary work set by the Labour Relations Act.

It is simply immoral and illegal that SAB did not register these workers for the Unemployment Insurance Fund, and now they will be robbed of the little help from the UIF that they should have received.

The UIF and the Department of Labour need to impose the necessary fines on them for this and also ensure that those workers are registered with the UIF and all due contributions are paid.

The Federation is calling on the government to open dialogue with the alcohol industry to find a compromise and a common solution to this complex problem.  This needs to include the entire value chain, from the wine farms to distribution to retail etc.

The Alcohol Social Compact drafted at Nedlac between government, business and labour need to be finalised, signed, and implemented.  Many of its provisions will help the industry to transition to a new normal, reduce excessive consumption and the abuse of alcohol and help to alleviate the pressures on the health care sector.

The Federation supported the temporary banning of the sale of alcohol under alert lockdown level 3 to enable government healthcare institutions and law enforcement structures to focus on dealing with the rising rate of Covid-19 infections.

It is a fact that alcohol abuse has previously led to the hospital emergency units at our healthcare institutions overwhelmed because of alcohol abuse.  We still cannot afford to overpower our healthcare institutions when they are struggling to cope with a surge in infections. 

It will also be unfair to place healthcare workers in the invidious position of having to choose who must live or die.  We witnessed a surge in alcohol abuse victims in emergency units when the first ban was lifted, leaving the government with little choice but to act. So, a practical and sensible solution has to be sought by all stakeholders to resolve this standoff.

COSATU’s principled position is to save both lives and livelihoods.  We are in a deep economic recession with an unemployment rate of 40% and rising.  Millions of jobs and wages are at risk and we have close to a million workers whose livelihood depend on the sale of alcohol.  These range from farmworkers to distilleries, manufacturers, distributors and retailers, restaurants, and bars.  

The current ban on the sale of alcohol has been devastating and a prolonged ban would place their survival at risk.  We simply cannot afford to lose any jobs or businesses. The ban and other lockdown restrictions should always be treated as temporary interventions.  

The total banning of alcohol is not a solution and lazy and populist politicians who advocate for such are misguided. 

A permanent ban will encourage and play into the hands of criminal syndicates who are already selling unregulated and dangerous alcohol while not paying any taxes.

Even the nurses and healthcare professionals are paid through the sin taxes extracted from the alcohol economy. Prohibition has not worked where it has been tried and it will not work in South Africa.

What is needed is a cultural shift towards alcohol and tighter regulation of its consumption and advertising.  It is an indictment on government that 26 years after the democratic breakthrough, taverns are one of the few venues for economic activity in townships and rural areas.  

Government needs to show leadership and business must show patriotism in dealing with the effects of the alcohol ban on the economy and the alcohol abuse problem on our health system.  There are no perfect solutions on this matter, so dialogue and compromise should be used to resolve it. 

It’s critical that whilst restrictions on the right to trade for businesses are in place under the disaster management regulations, government and the banks provide these workers and businesses with relief. 

Such relief needs to come from the UIF’s Covid-19 TERS, the R350 unemployment grant, a revamped Loan Guarantee Scheme, and debt relief for consumers and businesses.

It is sad that the SA Reserve Bank missed another opportunity, last week,  to come to the party and reduce the repo rate further. This  would have provided the badly needed relief for consumers and businesses and also stimulated the economy that cannot rely on the fiscus for any stimulus.

 Issued by  Sizwe Pamla, National Spokesperson, COSATU, 26 January 2021