Staggering Numbers From SA’s Food And Beverage Industry Collapse

22 July 2020 – SA’s Food And Beverage Industry is in a state of “complete and utter collapse”, with income dropping almost 95% in April 2020, and then 88% in May 2020, on a year-on-year basis.

In April 2020, the food and beverage sector generated only R241-million in income compared to almost R4.5-billion in April 2019. The lockdown relaxation helped marginally in May 2020, lifting the sector’s income to almost R550-million.

Much of this collapse, of course, stemmed from the complete prohibition on licit alcohol sales (one wonders how much income has been generated by bootleggers, but that is another story). While in no way a surprise, it is still sobering to see bar sales down 100% – that is a pretty emphatic figure.

Food sales, including takeaways, have also been extremely limited – remember the flap over the DTI’s strange rules about warm food and cooked chicken?

Yes, remember when one of the biggest gripes surrounding our lockdown was the fact that Woolies weren’t allowed to flog their roast chickens?

Seems like a lifetime ago.

There is a groundswell of support for South African restaurants and their plight, and on Wednesday, the biggest-ever protest in the history of South Africa’s restaurant industry is set to take place, dubbed the ‘Million seats on the streets’ protest.

For bars, however, the situation is even more dire, and it’s generally accepted, even among those who rally against the lockdown, that opening them would be irresponsible.

The numbers above, while staggering, actually don’t paint the full picture:

The sector is generally low wage and labour intensive, with workers who often depend on tips. This means it employs a lot of people who don’t have much in the way of savings and often have several dependents. Various industry associations have warned of a jobs bloodbath because of the reimposition of the alcohol ban – a lot of people like to have a drink when they eat out, so the policy has ripple effects.

The Stats SA data throws this into sharp relief. Sub-sectors that are down 100% can hardly afford to employ anyone, and those that have lost 85% of their business can operate with a skeletal staff at best.

There’s that word ‘bloodbath’ again.

The Stats SA numbers are backed up by data from data analytics company Nielsen, which estimates that the liquor industry in South Africa lost R20 billion in sales in the first nine weeks of the national lockdown.

That works out at more than R300 million a day, and the industry is set to lose around R10 billion for each month that the ban on the sale of alcohol continues.

News24 reports that there was a spike in sales when the ban was lifted (temporarily), but it hardly made a dent in the bigger picture:

When the industry was allowed to trade again in mid-July, sales increased by 126% in the first week and 61% in the second week. However, by the third week of reopened alcohol trading, sales had dropped to just 0.5% above normal, an indication that consumers did not have the cash to continue spending.

The second prohibition announcement left consumers with no time to stock up.

“The worst possible scenario that will play out is that more than 40% of annual sales will possibly be eradicated and some volumes may be regained, but not completely recovered,” said [Kelly Arnold, managing director for Nielsen South Africa].

There is no doubt that there is a correlation between the sale of alcohol and the number of trauma cases that hospitals are seeing, but the ban is also an easy out for a government that has failed to adequately prepare on so many levels.

Whilst our mortality rate per 100 000 residents remains amongst the lowest in the world, our hospitals have turned into horror shows, and our president has yet to front up and take questions from the media about the rationale behind many of the decisions taken.

Had the time we bought ourselves through the early decision to enact a strict lockdown been used wisely, we perhaps wouldn’t find ourselves in a situation where such drastic measures were necessary now, causing industries to be brought to their knees. Source (2Oceansvibe)