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Between liquor and a hard place

Economic sectors in the country are trading war stories about the impact of COVID-19, while wrestling for the limited support various government arms are extending.

While the situation is not a competition, it cannot be denied that the liquor sector has some of the worst war stories about COVID-19, particularly night clubs which have been non-operational since March last year.

Figures coming out of the sector are horrifying, indicating that last year, producers lost P880 million, while shedding 190 jobs. At least 650 liquor outlets were closed during the period and alcohol was only sold for 183 days out of a total 286 days between March 21, 2020 – the first sales ban – and December 2020. This year, alcohol has been banned for 56 days already.

Even though limited alcohol sales are currently permitted, the industry as a whole exists on tenterhooks, keenly aware that tomorrow is never guaranteed and that a sales ban or tighter restriction is looming around every corner.

It should be borne in mind that even before COVID-19’s onset, the liquor sector was emerging from a 10 year nightmare with the 55% alcohol levy as well as threats to impose a costly track and trace system by BURS. The industry also has the unique ignominy of being one of the only industries that statutorily has to encourage its consumers to purchase less of its product, a situation that lends itself to inherent bad faith among critics of alcohol.

While on the surface, it would appear government has an intolerance for the alcohol sector, in reality it can be easily proven that the Ministry of Investment, Trade and Industry is actually an advocate for the sector and has been fighting behind the scenes

to facilitate the resumption of trade whenever there has been a disruption. As admitted by the heads of that Ministry, the alcohol sector in Botswana supports an ecosystem of downstream and associated industries which include transport, various levels of retail trade, restaurants and the hospitality sector and even tourism. In addition, many of the alcohol industry’s downstream sectors are dominated by citizens, the youth and women, who represent some of the most economically vulnerable demographics.

Collectively, hundreds of thousands of jobs are reliant on the taps being kept open and any trade suspension sends ripples throughout the ecosystem.

It is clearly evident that middle ground has to be found between the concerns of health authorities and the crucial need to minimise and even eliminate trade disruptions in the alcohol sector. One way of doing this is by aggressively developing flexible regulations for the online retail system for alcohol, where consumers can minimise interface at retailers and thus reduce the threat of COVID-19 spread.

Another is by beefing up existing law enforcement and by law supervision to speed up and entrench the behaviour change required under the #DinweleDladleng paradigm shift. The pandemic is requiring that behaviour change, where previously there was the luxury of being gradual, now be supported as if livelihoods depend on it, which they do.

Alcohol is an integral part of Setswana culture and an important part of the economy. The sector will not survive unless interventions are taken to mitigate the impact of COVID-19 on it.

Today’s thought

“Innovation is the central issue in economic prosperity”

– Michael Porter


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