BFTU ON CLOSURE OF LIQUOR INDUSTRY

Introduction

We have followed with keen interest the continued restrictions imposed on the sale of liquor in order to control the COVID-19 pandemic. We have also received reports of workers woes in the liquor industry through our affiliates, Botswana Transport and General Workers Union (BTGWU). Admittedly, there seem to be a correlation between the spread of the corona virus and the consumption  of  alcoholic  beverages.  This  correlation  is  a  result  of  the behavior of some sections of people after consuming of liquor. There is a tendency for people to gather in drinking places such as bars and other liquor retail outlets. It is this behavior that becomes fodder for the spread of the coronavirus.

The COVID-19 pandemic has affected different sectors of the economy differently. The hardest hit sectors include among others the Tourism and the liquor industry.

2.   The interdependence of economic sectors

It should be noted that Liquor is a multi-million pula industry in Botswana and it forms a significant value chain that sustains many livelihoods. Many people are employed by the liquor industry and it also generates revenue for government in the form of tax and other levies. In the US, the alcohol industry alone employs over 2.5 million people. A study commissioned in South Africa by the Association Responsible for Responsible Alcohol Use estimates that approximately 90,000 are directly employed by the industry. Furthermore, a staggering 500,000 jobs are either directly or indirectly linked to alcohol production, distribution and sale. There is normally a temptation to moralize and consider alcoholic beverages as ‘bad’ as they influence those that indulge in unorthodox behavior, that could be true but the reality is that our livelihoods are largely dependent on the industry. The liquor industry is a vital sector that absorbs a lot of labour and, moreover, it is an important cog of our burgeoning manufacturing sector. Therefore we should consider regulating its use and not closing the industry altogether.

Our preliminary investigation, done with the Institute for Labour and Employment Studies (ILES), shows that the alcohol industry in Botswana provides direct employment to approximately 50,000 people. By direct employment we mean people who are employed in production, distribution sale of alcohol beverages. The entire value chain itself supports about 200

000 people with indirect employment i.e. positive spill-over effects.  These are people that depend on the alcohol industry and its value chain. Admittedly, these are conservative estimates. It should also be noted that KBL utilizes two critical inputs in its production process being water and electricity. This effectively implies that the utilities corporations are directly affected by the closure of KBL. The two corporations will lose revenue in excess of millions each per month.

Our priority as a nation in the fight against corona virus is to save human life and also save the economy against total collapse.  Our strategies to control the spread of the corona virus should therefore be done diligently to avoid a total collapse of the economy at the same time ensuring that we save lives.

3.   Recommendation

The coronavirus is a deadly virus and it is our belief that efforts by government to procure the vaccine are ongoing. In the meantime countries of the world are caught between balancing saving human life and ensuring that the economies do not totally collapse. It is in a situation like this that social dialogue  becomes  critical  in  our  quest  for  what  is  best  for  the  country. Leaders in the various economic sectors should be engaged in the course of this balancing act.

Our view is that the government should meaningfully engage the critical key stakeholders in the industry. We steadfastly believe that those in the industry understand   the   challenges   of   their   industry  better   and   can   provide meaningful  solutions  that  do  not  put  the  livelihoods  of  many  Batswana workers at risk and ultimately putting the lives of many Batswana at risk of contracting the virus.

We note with regret the press release from Kgalagadi Breweries (PTY) LTD in which they inform stakeholders and the public at large that they will suspend operations effective from the 25th  January 2021 until alcohol sales and consumption are reinstated. While the letter acknowledges the support that the government has given to KBL, it is evident from the tone of the letter that there was no meaningful dialogue between key social partners. However, we have received encouraging feedback from BTGWU regarding an agreement made with KBL after negotiations between the two parties. We therefore applaud KBL for engaging in dialogue with the union to reach an amicable solution. This is the needed action that all employers must follow during this difficult period for economic recovery.

The Botswana Government should engage both the Botswana Alcohol Industry Association (BAIA), Business Botswana, KBL and BTGWU to find a way in which the industry can continue to operate without putting the lives of Batswana in danger. There are certainly many ideas that can be considered. We do not believe that total closure is the only solution. While closing the alcohol industry may seem to offer a relief in terms of controlling the spread of the virus, in reality, it is a temporary relief as on the flip side the whole value chain of the industry would collapse as people will lose their jobs and income. We further gather that KBL employees will be placed on unpaid leave until the resumption of alcohol sales and consumption, we therefore plead and implore the government to extend wage subsidy to the affected employees. Moreover, we further plead with the commercial banks to extend a moratorium on bank loans held by KBL employees who have been put on unpaid leave.

Issued on 26 January 2021 by

Thusang Butale

Secretary General