COVID-19 impact on Namibia Breweries Limited (NBL)

As a leader in the local alcoholic beverages industry, Namibia Breweries Limited (NBL) – a subsidiary of the Ohlthaver & List (O&L) Group – and a proudly Namibian company, is substantially impacted by the current ban on alcoholic sales, which has been extended to 1 June 2020. In an effort to avoid further loss to its business but also the industry as a whole, NBL remains committed to working with various stakeholders to ensure that the alcohol beverages industry can resume operations as soon as possible.

Managing Director of NBL, Marco Wenk in a statement issued on Friday, 08 May 2020, stressed that NBL is committed to complying with regulations put in place by the Namibian Government in supporting efforts to combat the spread of COVID-19. Wenk: “Yes, it is very unfortunate that our industry has been brought to a virtual standstill, but we are committed to comply with the directives and are using this time to work with other industry players and stakeholders to ensure that safe and responsible trade can resume without delay.”

When asked about retrenchments as a result of the liquor industry shutdown, Wenk confirmed that retrenchments would be an absolute last resort. Wenk: “We have instituted various cost cutting measures including salary reductions for executives, while the rest of our more than 900 employees have thus far continued to receive their full pay.” Wenk however stressed that revenue had come to a virtual standstill over the past 5-6 weeks. All alcoholic beverages sales, specifically those above 3% alcohol content, are by far the largest part of NBL’s business and have unfortunately been banned since 28 March 2020 and until the end of Stage 2. In addition, the prolonged ban on alcohol, will start to impact finished and unfinished stock write-offs of significant proportions for NBL in the near future.

According to Wenk, export markets such as Zambia and Tanzania, where alcohol sales are permitted, would be resumed, but come with significant route to market challenges and costs, making these options less viable. Wenk: “While we still need to assess the overall impact of COVID-19 on our business going forward, we are extremely concerned about the prolonged prohibition of alcohol sales. Should this not come to an end soon, we would have to take some tough decisions in the interest of sustaining our business. Of equal concern is the impact which the prohibition has on over 300,000 Namibians linked directly and indirectly to both the formal as well as informal alcohol trade. I can only applaud the Namibian Government for their immediate and decisive actions to curb the spread of COVID-19. The current status of infections is commendable. It is however vital that we now find a balance between ensuring the health and wellbeing of our nation while at the same time recommence operations and by doing so restart the economy. It is thus imperative that we need to find an urgent solution and work with all stakeholders to forge sustainable and practical ways of working in the interest of our industry. “

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