Oxford Economics has released the first local report to assess the beer industry’s local economic impact footprint in South Africa. Given its scale and its impact along value chain, a thriving beer sector is a key ingredient for global economic recovery.
The said report published in 2022 found that the beer category supported R71bn in gross value-added contribution to South Africa’s GDP, which included R43bn in tax payments to the government. To put this into perspective, the beer industry represented R1 in every R79 of South Africa’s GDP in 2019. But that is only the tip of the iceberg.
Considering the record high levels of unemployment facing the country, the report found that the South African beer industry contributed around 248 000 jobs to our nation’s economy in 2019. At the time of data collation, this represented 1.5% of all jobs or 1 in every 66 jobs in the country. In Port Elizabeth alone, beer accounted for 67% of total employment.
According to SAB CEO Richard Rivett-Carnac this is the first time in over a decade that there has been such a comprehensive investigation into the South African beer economy. “One of the key pillars of our strategy is to grow and lead responsibly- and this report highlight the important role that beer plays in the economic growth in SA. To know that every 1 in 66 jobs generated in the country is from beer gives me the inspiration to continue growing the beer category in a responsible manner. This is for the same reason we always say beer is local, inclusive and natural – the data from the report clearly articulates this.”
For him, this contribution to the job market is a feat that involves the cooperation of multiple sectors from agriculture to logistics to manufacturing, retail and more. “The beer value chain is all encompassing and drives economic activity at almost every level. It was found that tax revenue generated by beer in 2019 was sitting at around R29bn, which is the equivalent of 2.3% of the national tax base.”
Rivett-Carnac believes that this report provides an important marker for the industry and for the country’s economic ambitions.
The data, which provided the backbone of the Oxford Economics report, was provided by AB InBev (SAB), Carlsberg Group, Heineken, and Molson Coors Beverage Company, as well as data collected by Oxford Economics.
The report estimated that, in 2019 alone, South African four major brewing companies collectively bought R33bn worth of goods and services from South African companies through their supply chains. Procurement alone was estimated to have supported over 107 000 jobs and generated R6.6bn in tax revenue.
From a retailer perspective, which is a big driver of smaller township economies in South Africa, over 42,000 jobs are supported. This meant that for every job at a South African brewer, six jobs were directly created in the downstream value chain.
“Beer is a very local category. As a result, the jobs and taxes that we are able to generate are all from South Africa. This report encourages us to continue to play a meaningful role in our country’s development, concludes Rivett-Carnac.
