Cape Town, South Africa (CNN)While liquor sales in many countries have been deemed essential during these days of social isolation, South Africa has taken the opposite approach.
Alcohol ban has South African distilleries pivoting to a new product
The country has been on lockdown since March 26, in a bid to stop the spread of Covid-19, like many other places. But the rules are among some of the strictest in the world - you may only leave your home if you provide an essential service, or need to procure essential goods like food or medicine. On top of that, South Africa has banned the sale of cigarettes and alcohol, joining a short list of only three other countries: Thailand, Greenland, and parts of Mexico.
According to the South African government, the decision to temporarily ban alcohol was influenced by concerns such as compromising the immune system, lowering inhibitions when it comes to social distancing and personal hygiene, and the very serious charge of trying to reduce incidents of domestic violence.
Despite pleas from provincial liquor boards and other parties in South Africa to relax the ban on booze, the government is sticking to its original plan. For now, the lockdown will remain in place until at least the end of April.
It is a significant hit to the South African economy, especially the liquor industry, which bears the brunt of these regulations. In 2018, a "Research and Markets" report valued the country's liquor industry to be worth more than $583 million. The biggest market is the domestic one, and local producers like Inverroche Gin are already feeling the pinch.
"The sale, export and even transport of alcohol is expressly forbidden during the lockdown, and all restaurants and bars were specifically ordered to close," says Lorna Scott, founder and CEO of Inverroche Gin. "Our entire industry came to a halt overnight. Short- and long-term budgets were rendered meaningless."
Inverroche Gin is one of South Africa's most successful and recognized artisanal gin brands, considered pioneers of the craft gin craze that has taken the country's liquor industry by storm. Located in the seaside town of Stilbaai in the Western Cape, they are one of a handful of local distilleries that have temporarily registered as an essential service to manufacture disinfectant -- pivoting to an entirely new product, for now.
Ordinarily, its license allows the company to only make spirits, so it had to obtain special government dispensation to use its current stock of alcohol for sanitizer. The South African Revenue Service also came on board, waiving excise duties on the use of potable alcohol. And so, working with a skeleton team, under very strict regulations, Inverroche Gin began making sanitizer.
Another famous South African brand, Distell, which makes several types of alcohol including whisky and brandy, has also committed 100,000 liters of alcohol to make sanitizer.
But, these products are not being made to sell; instead they are being donated to vulnerable communities across South Africa.
"Inverroche has made a commitment to produce hand sanitizers, in bulk and for free, based on the WHO recipe and using our base alcohol which was intended for the production of our gin, to the frontline workers," Scott tells CNN. "(We are) a key driver of economic growth in our local municipality and this initiative keeps us connected to the very people who have always supported us. It creates a sense of purpose for our own staff, and confidence and trust in our organization that we will weather this storm."
Other distilleries in places like the United States and Europe are using their facilities for sanitizer production, as the demand for it and other items, like face masks, has put a strain on traditional supply chains. While alcohol may be prohibited in South Africa, these brands are showing how the private sector can help the public sector combat Covid-19 while remaining solvent as a business.
"It cannot be business as usual," Scott says. "To keep your business alive, you have to adapt to a new set of values and a new business model which recognizes and gives priority to sustainable practices, and embraces social and environmental responsibility."