SAB will be forced to destroy 400 million bottles of beer. The largest alcohol brewer SAB is set to destroy more than 130 million liters of beer. The brewer of Castle Large, Black label and Hansa beverages, SAB seeks government approval to move beer to its depots. They revealed that if barred to transport their beer, SAB will be forced to destroy equivalent of 400 million bottles of beer.
Transporting of beer expect for exportation remains illegal in South Africa Lock down Level 4. All alcohol sales are suspended. The South African Breweries stopped brewing beer on 23 March 2020 and suspended transportation of beer since the start of the lockdown on 27 March.
Due to the need to keep machines running and winding down production, SAB has been brewing and bottling alcohol during the lockdown. It has however reached its holding capacity required by the law to store at brewery facilities. SAB is currently stocking 132 million liters of beer which is approximately an equivalent of 400 million bottles. The beer is sitting in their tanks which they can’t pack due to the restrictions on alcohol capacity at their breweries.
SAB is set to encounter a record breaking estimated R150 million loss. If the company is not allowed to transport beer to its storage depots, it will be forced to destroy its stock.
The brewer revealed that they send a proposal to the government asking for permission to transport packed beer from breweries to its storage depots.
“Urgent action is needed to avoid material financial losses to both the government and SAB, as well as significant job losses. This would literally be pouring that tax revenue down the drain, at a time when government – and the citizens of South Africa – have an urgent need for those funds” the company said in the document.
SAB will be forced to destroy 400 million bottles of beer – What happens if SAB destroy its beer?
- The company will be forced to operate at 50% capacity for four months.
- No bottling or distribution could take place, given that the beer is discarded.
- This would mean the loss of about 2,000 jobs – half of SAB’s frontline workforce.
- Government excise duty loss of around R500 million
SAB warns the government that it’s set to lose an estimate of R2 billion in excise duty since it won’t reach full capacity for four months if it destroy its beer. More so disposing beer of such quantity possess a massive environmental risk. If granted permission to move the beer, SAB said that it will work with the police to secure the alcohol.