- Alcohol ban cripples KBL
- Brewer has cut staff salaries twice
As a result of the alcohol ban by President Mokgweetsi Masisi, beer brewing firm, Kgalagadi Breweries Limited (KBL) says it has no choice but to retrench employees as a result of mounting losses.
The company wrote in an affidavit filed at the court of appeal. KBL has filed an expedited appeal through which it seeks the Court of Appeal to overturn a High Court Ruling that dismissed KBL’s application to have its case, which challenges the legality of the alcohol ban, heard on urgency.
KBL has thus announced the regrettable decision to retrench as it attempts to survive severe negative financial connotations occasioned by countless alcohol bans.
Unpacking the effects of the alcohol ban, Botswana’s leading beer brewer and distributor said it employs 607 people.
KBL says its annual salary bill runs into tens of millions and that the 607 people support approximately over 2000 people who directly depend on them for survival.
“The imposition of the alcohol ban impacts not only KBL and its employees, but all those individuals and businesses associated with the production, marketing, distribution and sale of beer,” states KBL. “That includes transport business owners and their employees, bars, bottle stores and their employees, hotels, cafes and restaurants and their employees.”
Represented by Minchin & Kelly, KBL has made an expedited appeal before the Court of Appeal challenging the legality and rationality of the alcohol ban.
Meanwhile, the brewer is counting loses and projecting a gloomy future for its operations, employees, alcohol industry stakeholders and those interlinked to the same value chain.
In the aftermath of the ban, KBL has been forced to shut some of its operations indefinitely and anticipates massive job losses.
RETRENCHMENT LOOMS
KBL says it will have to place some employees on unpaid leaves while others will be retrenched as the business is no longer sustainable.
“The current position is unsustainable and KBL will shortly have to commence a programme of placing non-essential employees on long term unpaid leave and having to retrench employees, in due course.”
Following the announcement of the 28 June ban, KBL ceased production in Francistown and Gaborone Chibuku plants explaining that the product has a short life span.
Therefore, the end result impacted on employees who had to be sent home until the ban is lifted.
KBL is counting loss of revenue in millions.
Against this background, the brewer argues that in respect to these losses, neither KBL, its employees nor those affected by the court will have recourse hence the need to seek the intervention of the courts.
According to its filed notice of motion, as per each day that passes, the liquor trader together with its employees suffer prejudice.
“As the ban continues, KBL will thus be unable to retain its employees and they will lose the means to earn a livelihood,” states the papers.
Moreover, dark days beckon for Botswana’s economy which is already enduring its worst downturn in history. KBL notes that the impact of job losses will be massive.
“The material considerations in the present case are not commercial simpliciter, despite the court a quo incorrectly saying so. In other words, the case was not, as the court a quo misconceived-merely about KBL seeking to protect a commercial interest.”
KBL CUTS SALARIES
KBL says it will cut its production.
“KBL has had to manage the ban by reducing production and reducing the payment of its employees,” states court records.
Further, it adds that its employees have had a 10 percent salary cut since July 2021 “as a result of the April 2020 and May 2020 alcohol bans.”
Sadly, the firm reasons that the salary cuts were implemented as an impact of the first alcohol ban in 2020 and was subject to review due to uncertainty of any possible future bans.
KBL had also reduced salaries again in January 2021.
“There was an additional reduction of salary in January as a result of the alcohol ban imposed on the 4th of January 2021. In January 2021, some employees went on unpaid leave, which impacted the affected employees at 22.8 percent less salary for that month only (this included the ongoing 10 percent reduction in effect from July 2021),” reads KBL’s papers.
KBL anticipates a further financial impact occasioned by the current ban.
ALCOHOL INDUSTRY VALUE CHAIN
Referencing to a study by the Institute of Employment and Labour Studies (IELS), KBL says the alcohol industry in Botswana provides employment to approximately 50 000 people.
“These are those employed in the production, distribution and sale of alcoholic beverages, owner drivers, bars, bottle stores and other liquor retail outlets,” wrote KBL in its court papers. “The entire value chain itself supports about 200 000 people with indirect employment.”
KBL says the ban negatively affects the country’s revenue made through taxes and levies.
Narrowing to economic loss suffered as a result of the ban, KBL highlights that it uses water and electricity in production therefore the utility corporations thereunder are affected.
