According to reports, SAB says it may need to dump “400 million bottles worth of beer in current liquid inventory which will prevent SAB from operating at full capacity for at least four months.”
SAB has reportedly been unable to package and transport beer inventories between its depots and warehouses. The brewery has pleaded with the government to allow it to move the inventory, preventing this massive loss for the company.
“If SAB is not able to resume transporting inventory in the next 48 hours, it will be forced to discard this inventory, at a loss of an estimated R150 million to SAB,”
The company has reportedly not initiated any new brewing since 23 March, nor have they sold or transported in South Africa since 26 March, adhering to lockdown regulations.
During the lockdown, the brewery reportedly said that it has been fermenting and bottling alcohol as part of the orderly wind down with the skeletal staff.
With that said, brewery facilities have a very low limit legally at which they can store alcohol.
“For SAB to be able to continue packing the current brew, they have to be able to transport the alcohol to SAB owned warehouses for safekeeping. SAB is not legally allowed to store brewed beer once it reaches a certain capacity.”
“Once breweries reach permissible limits, the alcohol needs to be stored on offsite SAB owned facilities. As the movement of alcohol is not permissible – the beer would in this unique instance need to be destroyed,” said SAB.
Effects of Disposal
According to SAB, if it has to dispose of the alcohol, it would prevent them from operating at full capacity for at least four months. This may negatively affect thousands of jobs.
“If SAB has to discard its current inventory, the company would be forced to operate at about 50-percent capacity for four months. This would mean the loss of about 2,000 jobs – half of SAB’s frontline workforce.”
It continued to say that government stands to lose up to R2-billion in excise tax.
SAB also said that disposing of the beer will be a massive challenge and could cause serious environmental risks.
