Beyond the simple inconvenience of having happy hour cancelled indefinitely, alcohol-related industries are fighting for their very survival
Restaurants and retailers are facing the financial implications of having their business put under lockdown.
Marc Pendlebury, co-owner of WhiskyBrother shares how the recent prohibition of alcohol has affected his business, which makes 100% of its income from the sale of alcohol.
Running a business on no income
WhiskyBrother is an award-winning speciality whisky store based in Morningside, Johannesburg and has been closed since Sunday 12 July when the president announced the ban on domestic alcohol sales. This after the store had been operating for just over a month since the initial ban on alcohol sales.
“The activities we engage in daily, are forced to cease. The biggest impact though is the financial management required; engaging with the landlords of our various premises as we simply can’t afford to pay full rent while not generating income, and working with our suppliers who we have invoices due for payment, even though we are unable to sell the stock,” says Marc.
The impact extends further than the business owners themselves as it also affects their staff and their families.
No relief from insurers
Many businesses affected by the COVID-19 pandemic and its after-effects have sought help from their insurance providers with little success. Whisky Brothers have also been disappointed in this regard.
“Although we have business interruption cover, a government-mandated alcohol ban, or for that matter a global epidemic, is not covered. We have heard the same for many of our counterparts as well. You can be assured that going forward we will have these specified in our policies but of course, that doesn’t help us this time around,” explains Marc
What to expect when the ban is lifted
With the ever-changing economic conditions and employment, it’s hard to imagine what South Africa will look like when the ban is lifted or when the ban will be lifted.
Marc says on predicting how the lockdown will affect the price of whisky: “It’s hard to know exactly but overall, I don’t expect much change in pricing. Smaller importers and distributors won’t be able to afford discounts since they will be cash strapped after not having sales for the better part four months. The larger suppliers may have excess stock of certain brands that they may want to clear, so they may offer short-term deals to incentivise sales. That, however, assumes that their supply chain is still moving and they have incoming stock,” he says.
Although WhiskyBrother didn’t experience the mayhem and panic buying seen at many mainstream retailers when the ban on alcohol was first lifted on 1 June, they did see an increase in online sales of 640%.