Liquor industry implores govt not to cut alcohol levy ...for now
Mbongeni Mguni | Tuesday September 25, 2018 13:50
Liquor traders, under the umbrella of the Botswana Alcohol Industry Association (BAIA), held discussions with assistant trade minister, Moiseraele Goya at their AGM yesterday morning.
The meeting came as government’s ongoing efforts to review both the alcohol levy and the liquor trading hours, continue through countrywide consultative meetings.
BAIA members, who represent the country’s largest producers, wholesalers and retailers of alcohol, told Goya that they would need between four and six months’ notice of government’s intention to lower the alcohol levy in order to protect themselves from losses on their inventories.
In any event, they said, government should not lower the levy between now and the end of the year as all liquor traders have stocked up for the traditional peak season, that runs from Independence to the New Year.
“At Sefalana, between Independence and Christmas, we carry between P80 million and P90 million of liquor stock and if there’s a reduction, we cannot sell that stock at a mark up,” Sefalana group managing director, Chandra Chauhan told Goya.
“We would have to take a huge hit on the price we bought the stock for. We need at least four months to liquidate our stock.
“September to December is our peak period and as an industry we usually carry large inventories. It is not the right time to implement any abrupt measures.
“As you had said, you are still consulting but we are saying a notice period is essential.”
A senior Trans Africa official also pleaded with Goya to postpone any reviews of the alcohol levy to next year, saying losses would be suffered otherwise.
The minister told the liquor traders that while government planned to implement changes to the liquor trading hours this year, a decision on the alcohol levy would come from the health ministry, which is leading consultation.
“I will take it up with my counterpart at Health, to explain that the industry is saying ‘don’t do it before the end of this year,’” Goya said.
“What I know is that the health ministry is doing consultations this year, but their intention is to revise the levy next year, which is what you as the industry also want.”
Introduced in 2008, the alcohol levy presently adds between 50% and 55% on the unit cost of liquor sold in Botswana, depending on the alcohol content of the product.
Government has said it is amenable to scrapping the levy in its entirety, or simply reducing it.