South African Breweries (SAB) and the government have reached an agreement, allowing the brewery to transport its packaged inventory from the manufacturing plants to its depots in the coming weeks. This will save millions of litres of beer from being dumped.
“Permission to transport a portion of our packed inventory had been obtained and SAB continues to operate within the confines of the law,” the company said in a statement.
This decision comes after SAB announced that they would have to dispose of some of the inventory as they were over capacity at many of their warehouses. As they were unable to absorb further inventory, it affected any beer currently being produced and thus the supply chain and job security.
Without this agreement being reached, 132-million litres of beer would have had to be poured down the drain. The company also would have to operate at 50% capacity for four months, which equals to a loss of 2000 jobs. This would also leave a R500-million loss in excise tax for the government.
Last week, before the decision was reached, one of the SAB breweries in Pretoria was seen disposing of 25 000 litres of beer.
Beer drinkers look away now. SAB has begun dumping beer. 25 thousand litres went down the drain in PTA today. Unable to sell or move current stock, SAB could dump over 130 million litres. pic.twitter.com/BicgC29aFJ
— Vumani Mkhize (@VumaniMkhize) May 8, 2020
With this new agreement, SAB will be able to keep their inventory in a safe place and avoid losses in excise tax for the government to the value of R500-million.
“SAB would like to extend its gratitude to the government, this move during these difficult times is a clear indication that we can and should collaborate on solutions that will help protect the livelihoods of the over 250 000 South Africans across SAB’s broad value chain,” the company said.