Counting the Costs of South Africa’s Ban

Anheuser-Busch InBev NV’s South African division canceled a further $165 million of investment after the government banned alcohol sales for a third time to control a resurgence of coronavirus cases. The move brings the amount of spending called off by South African Breweries to 5 billion rand since the Covid-19 pandemic began to take off in the country 10 months ago. President Cyril Ramaphosa’s government has used various forms of drinking restrictions as a means of managing the crisis, easing the burden on hospital wards that typically have a high volume of alcohol-related cases. SAB, the maker of popular lagers Castle Lite, Hansa and Carling Black Label, has toughened its stance since the latest prohibition was announced on Dec. 28. The country’s biggest brewer said last week it will challenge the ban in court, saying the measure is unconstitutional. The spending had been earmarked for upgrades to operating facilities, product innovation and new equipment at selected plants, the company said. AB InBev, the world’s biggest brewer, acquired SAB as part of its takeover of SABMiller Plc in 2016. The South African company can trace its roots back to Johannesburg’s late 19th century gold rush, when it catered for thirsty miners.

SOURCE: BLOOMBERG