A trading update of parent company SABMiller — the world's second-largest brewer — released this week said worldwide beer volumes were 1% lower, but down 2% in South Africa.
The timing of Easter and deteriorating economic conditions also affected the company.
Shebeens have been a feature of South African life for many years while remaining illegal. Regulators have been unsure how to deal with the issue and now each province is establishing its own liquor legislation.
Richard Chance, head of corporate social responsibility at SAB, said the issue of shebeens needed to be dealt with holistically — a simple ban would not resolve the many issues associated with them.
It is estimated that of 250,000 liquor outlets in the country, fewer than 20% are licensed. It is unlawful to sell liquor to unlicensed operators.
A technical flaw in the Western Cape Liquor Act has led to the reopening of at least 40 illegal shebeens since January.
There are an estimated 30,000 illegal shebeens in the province and 6680 legal drinking establishments.
Chance said that while shebeens should be regulated, this needed to be done through gradual transition.
On the upside for SABMiller is the 25% uptake of traditional beer, or sorghum, in Africa. Products such as sorghum and cassava are increasingly part of the brewer's strategy.
For the majority of the African population, clear beers are too expensive — at about one a serve — so SABMiller is working to capture a chunk of the approximate 3-billion-a-year cheap home-brew market by using local crops such as sorghum instead of barley to make low-cost lager.
This could be sold at about 70% of the current price.
Source: Sunday Times
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