Alcohol Ban Masks Government’s Own Failures

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That the alcohol industry was “blind-sided” by the government’s immediate reinstatement of the alcohol sale ban comes as little surprise. Ours is a government that has long ago dropped the pretense of engagement with citizens or enacting clear, measurable, objective regulations. In a joint statement, the National Liquor Traders Council, South African Liquor Brandowners Association (Salba), the Beer Association of South Africa, Vinpro, and the Liquor Traders Association of South Africa, said:

“The industry was given no warning about the ban, nor an opportunity to consult with the National Coronavirus Command Centre (NCCC) before a decision was made and no consideration was given to the immediate logistical difficulties it poses for both suppliers, distributors and retailers alike.”

With the ban on the sale of alcohol, and the re-imposition of a curfew, the government implicitly admits that, to divert attention from its failure to adequately prepare the public healthcare sector for a rise in COVID-19 cases (that it says it always knew was coming), it will shift the burden – and the guilt for stricter regulations – onto the shoulders of South Africans.

Suppliers, retailers, and businesses had absolutely no time to prepare for this new ban. The government acted completely in bad faith. Had the intention truly been to try and limit consumption, and the downstream strain on healthcare resources, why did the government not give suppliers and retailers some measure of lead-time? Why not allow customers to buy products online, giving the retailers at least a small chance of securing some revenue?

This is why: Government’s attitude has never been one of transparency, and most assuredly not one of trying to mitigate the negative effects of its policies and regulations. The more economic harm it can cause, the more joblessness it can manufacture, the more it can force people to become reliant on its ‘welfare,’ the happier it is.

The effects of the new ban will be devastating for the bottom line, and indeed the very existence, of retailers and restaurants, whose owners may have harboured some hope that they would be allowed to sell alcohol again at some point in the future. However, as is always the case with pervasive government regulations, this will bite especially hard for small-retailers and operators. They simply do not have the reserves to handle extended periods of forced closure.

Given the country was hitting more than 30% unemployment before the COVID-19 lockdown, it would be a certain bet that joblessness has skyrocketed over recent months. Arbitrary, surprise regulations, such as this new ban on alcohol, will further add to the difficulties of the sector to continue being viable. And it will force suppliers and retailers to close down. Where the government has talked the talk about tackling the unemployment crisis, regulations such as this latest one indicate that it will definitely not walk the walk.

I have no doubt that many people abused alcohol as soon as they were allowed to buy it again. This would have added pressure onto the already constrained public healthcare sector. But to punish everyone for the actions of some is the rankest collectivist punishment – guilt by association, as it were. This ban punishes the suppliers, owners, workers, and all their families, involved in the alcohol industry.

I would wager that some of them were barely getting back onto their feet after the previous ban had been lifted; this new ban puts paid to hopes that the industry may have held for a semi-revival in the 2nd half of 2020. All those lost jobs are now on the shoulders of the government.

With any attempt at prohibition comes illicit activity. The flow of black-market alcohol will increase – as has happened with tobacco – and there will be a greater decline in taxes that would have been paid on these products. And, given the way human psychology works, when you ban something, you make it more attractive. The longer this ban continues, the more the government will be encouraging alcohol abuse.

With the increasing pressure on the fiscus (and the decline in tax revenue collection, as indicated multiple times by the South African Revenue Service) the only lens that helps make sense of the ban on the sale of tobacco products – and now the new ban on alcohol – is that government has fully taken on the role of moral crusader. The campaign against the social ills that plague the people, with tobacco and alcohol at the top of the list, is in full swing. The ostensible fight against COVID-19 has provided a convenient excuse. After all, people need to be constrained for their own good; individual freedom is the very bane of the authoritarian’s existence.

The industry estimated that, due to the burgeoning illegal trade during the first ban, and due to two months of lost sales, taxes lost amounted to R3.4 billion. Perhaps there’s some kind of silver lining here after all.