Continued ban on alcohol sales creating 'incredible risks' for SA, EU trade

Serious trade imbalances between South Africa and the European Union (EU) are creating unintended consequences due to the continued prohibition on the sale of alcohol in SA, Sibani Mngadi, spokesperson for the SA alcohol industry, has warned.

South Africa is the prime export destination for European spirits in Africa, with exports amounting to 255 million euros in 2019.

An Economic Partnership Agreement was signed between SA and the EU in 2016. It allows for the export of 110 million litres of South African wines duty-free into the EU region. In return, the EU exports mainly spirit products into Southern Africa. This trade is now constrained due to the extended ban on alcohol sales in SA. The agreement contributes R5.7 billion in net export earnings for SA on alcohol per year.

The South African alcohol industry, including the National Liquor Traders Council, the South African Liquor Brandowners Association (SALBA), the Beer Association of South Africa (BASA), Vinpro, the National Liquor Traders Council, as well as manufacturers, raised the alarm on Tuesday regarding concerns expressed by the European spirits industry regarding these trade imbalances.

"It is important for the government to consider the overall effect of the ban when deciding on the next steps in response to Covid-19 to avoid prejudicing important trade partnership [with the EU]," Mngadi said on Tuesday. 

He added:

“With progress being made in the health response to the pandemic, it is critical for the government to further limit the negative impact of the ban in the local economy and on our international obligations as a country. We are calling for government to provide clarity in terms of timing of lifting the ban.”

His comments come against the backdrop of an alarm raised from withing the EU itself, warning that the continued coronavirus ban on the sale of alcohol products in South Africa is creating "incredible risks" between the country and its biggest trade partner, the European Union.

This article originally appeared on Fin24

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