Europe’s top whisky and other spirit producers have hit out at the South African alcohol ban, saying prohibition hurts both local producers and European exporters, Business Insider reported.
SpiritsEUROPE, which includes the Scotch Whisky Association, says South Africa is the prime export destination for their spirits in Africa, with a total of €255 million worth sold here in 2019.
The group says it has asked the European Commission to look into the SA ban, as it damages trade agreements between South Africa and Europe.
“The ban rips away all the benefits from the Economic Partnership Agreement between the EU and South Africa at a time when we should actually find ways to deepen our trading relations to support each other’s recovery processes,” said Ulrich Adam, Director General of spiritsEUROPE.
The association represents the national organisations of countries such as Germany and France. It also represents major producers such as Diageo, Bacardi-Martini, and Moët Hennessy.
Diageo is one of the world’s largest producers, and manufactures brands such as Talisker and Johnnie Walker
According to Adam, the organisation is upset that South African wine producers are still allowed to export to Europe, while international producers are prohibited from selling their products in South Africa, just like their local counterparts.
“Banning sales also means banning imports of European spirits, while South Africa continues to export particularly wine which has 110 million litre quota duty free export into EU under the EPA – contributing to R5.7 billion in net exports earnings for SA on alcohol.”
SpiritsEUROPE says the initial ban, which was lifted on 1 June, cost the country R13.9 billion in taxes – excluding excise taxes. The second ban, which was instituted on 12 July, is on track to cost the country nearly R24 billion.
The organisation says that the loss in excise taxes, specifically, was R4 billion during the first ban. The second ban is on track for a potential loss of R7.2 billion.
“Our member companies operating in South Africa are deeply concerned about the uncertainty of current trading conditions,” says Adam. “The lack of clarity on whether and when the ban might be lifted makes business planning impossible. We therefore need a clear and reliable timeline.”