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The economic impact of the beer sector in SA

Compiled by Robin Hayes

On 12 September South African Breweries (SAB) launched a research document that detailed the economic impact of the beer sector in South Africa.

The report compiled by Oxford Economics and sponsored by SAB, provides a holistic view of the economic impact of the entire beer sector in the country and is intended to independently quantify just how important the beer sector is and the socio-economic footprint of the beer industry in South Africa, in a technically sound way.

According to Richard Rivett-Carnac, SAB’s CEO quoted in the report’s Forward, “while many previous studies exist showing the sector’s socioeconomic impact in part, none have ever attempted a rigorous, coherent estimate of our impact with the same metrics, at the same point in time.”

Rivett-Carnac continues: “What is apparent from the report is the positive role that beer plays in the South African economy. We have learned things we suspected, but never previously had data to verify: brewing is a highly productive activity, with spill overs of human capital into the wider economy. It underpins jobs and GDP throughout South Africa, both upstream and downstream.

“Using data from 2015-2019, the report concluded that 1 in every 66 jobs in the country has been linked to economic activity arising from beer, amounting to 249 000 jobs in total. The beer sector supported R7lbn gross value added (GVA) contribution to South Africa’s GDP in 2019, and Rl for every R79 of GDP in South Africa was linked to the economic activity from beer that year, meaning the beer sector helped stimulate about 1.3% of the South African economy. These are just a few of a number of compelling stats that highlight our economic impact from brewing to distribution, procurement. sales and marketing” he said.

Other interesting stats produced in the report in the 2019 year include:

  • On average, beer manufacturer’s employees were around nine times more productive than the average South African worker.
  • R33bn in goods and services was the value procured by beer manufacturers from other SA companies.
  • The beer sector sold R73bn worth of beer to final consumers in SA.
  • Beer production, selling beer to consumers, retailing and the hospitality outlets supported a total tax contribution of R43bn.

“At a moment when South Africa’s economy seems to be on the cusp of recovering, our socio-economic footprint highlights our potential to invigorate the economy by leading and growing our category. Beer matters, for the economy, job creation and the success of a wide array of partners up and down our value chain. We have a mission to get South Africans to see beer differently. Our aim is to leverage our role in the economy to continue to responsibly contribute to our communities and society and build this country forward. This report strengthens the foundation to move that vision forward” Rivett-Carnac concluded.

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