KBL’s ultimatum is supported by the Alcohol Industry Association and Business Botswana. However, President Masisi is reportedly unperturbed because he believes that the State of Emergency (SoE), gives him unfettered powers to do what did to save Batswana from the scourge of COVID -19 and so he will brush the litigation aside.
In the litigation, which was filed on 6 July 2020, through their attorneys Minchin & Kelly KBL is asking the court to set aside the decision by the Government of the Republic of Botswana to impose an indefinite wholesale ban on the sale of alcohol in the country.
Further KBL is seeking orders declaring that the imposition of a complete ban on the sale of alcohol be deemed unlawful and improper. The company believes that the government’s wholesale alcohol ban is improper and not based on clear and objective evidence, demonstrating a causal connection between the wholesale ban on alcohol and the reduction of positive COVID-19 cases.
In the papers filed before court, KBL argues that the government does not consult with industry traders to atleast agree to a business-friendly arrangement to allow alcohol traders to organise themselves and at least reduce the losses.
According to investigations by The Business Weekly & Review, KBL wanted to sue the government when the alcohol ban was effected in January this year. It is said despite seeking a court order to set aside the ban and consider it unlawful, KBL also wanted to sue the government for damages (losses incurred), which run into hundreds of millions of pula.
Attorneys acting for KBL at that time, advised against suing the government on condition that it would burn bridges. KBL apparently backed down in the hope that there would be consultations on further decisions to be taken. President Masisi’s recent decision is said to have surprised KBL and other traders. They say that the ban came just after the manufacturer had brewed alcohol worth hundreds of millions, some of which, like traditional opaque beer Chibuku, has a short lifespan. Furious, KBL approached Minchin & Kelly, which this time around agreed to file an urgent application.
However, sources say while President Masisi’s government has failed to provide evidence that the spike in COVID-19 cases and deaths is directly related to alcohol consumption, the government reasons that alcohol-related accidents continue to take up bed spaces in hospitals, which reduces the government’s capacity to fight the COVID-19 pandemic.
Further, sources have told The Business Weekly & Review that President Masisi believes that through the State of Emergency (SoE), which gives him unfettered powers, he will just brush the litigation aside.
KBL views the latest ban as unlawful becuase it will devastate livelihoods throughout Botswana, from retailers, to transporters, distributors and KBL itself, as Botswana’s leading brewer and distributor of beer, who had been hard hit by the numerous bans effected since 2020.
Because of the latest ban, KBL has once again stopped trading while its fixed costs and obligations to employees and suppliers remain unchanged. The alcohol value chain directly and indirectly employs approximately 50,000 people and supports approximately 200,000 livelihoods in Botswana. Sechaba Holdings Limited, KBL’s holding company, has lost P604 million in value in the space of a year, according to data availed by the Botswana Stock Exchange (BSE).
In terms of market capitalisation, the company is currently valued at P1.8 billion compared to P2.4 billion in May 2020, which is a drop of P604 million. Sechaba is also facing declining profits. For the year ended December 2020, KBL recorded profit after tax of P239.5 million in 2020, a 21 percent (P26.9 million) drop from the P302.7 million registered at the end of 2019. Volumes sold declined by 29 percent in the period under review.
KBL believes that it contributes significantly to Botswana’s fiscus, so much that it deserves to be respected by the government and be consulted when decisions that affect it are taken. KBL is not alone in this fight against government. The Botswana Alcohol Industry Association (BAIA), Business Botswana (BB) and Botswana Beverages Association (BOBA) have described as shocking President Mokgweetsi Masisi’s indefinite suspension of the sale of alcohol.
Responding to the abrupt prohibition last week, the three organisations shared a common view that banning the sale of alcohol and closing its outlets is not a proven mechanism of combating the deadly COVID-19 virus. “History has proven that the blanket prohibition of alcohol trade is not an effective mechanism to reduce transmission of COVID-19 and ultimately does considerably more harm where the preservation of lives and livelihoods is concerned,” BAIA said in a press release.
The organisation added that the decision was arrived at without consultation despite its repeated calls for notification prior to making such decisions. “As an example of the impact of the last-minute announcement, BAIA members were forced to recall trucks en route to deliver products to wholesalers/retailers across the country,” the statement went on. “Additionally, KBL is in the process of decanting hectolitres of its Chibuku product, due to its short shelf-life. This is a huge cost incurred that could have been avoided.”
Proposing solutions, the organisations urged authorities to target law breakers instead. “BAIA, BB and BOBA implore authorities to increase patrols and enforcement of the law,” the statement added. “The few ‘hot spots’ are known and all it takes is to deploy enforcement task teams to these locations to ensure COVID-19 protocols are followed.”
BAIA called on the government to respect the wellbeing of stakeholders in the alcohol industry. “The collective associations will continue to engage government through the appropriate forums with the hopes of influencing government to adopt a more balanced approach,” it added. “In the interim, we urge all our stakeholders to abide by all regulations as communicated by government.”