Anheuser-Busch InBev NV’s South African division canceled a further 2.5 billion rand ($165 million) of investment after the government banned alcohol sales for a third time to control a resurgence of coronavirus cases.
The move brings the amount of spending called off by South African Breweries (SAB) to 5 billion rand since the COVID-19 pandemic began to take off in the country 10 months ago.
SAB, the country’s biggest brewer said last week it will challenge the ban in court, saying the measure is unconstitutional.
South Africa President Cyril Rampahosa has banned alcohol sales as part of efforts to free up space in hospitals burdened with alcohol-related injuries for COVID-19 patients.
Economists say the ban put more than 165,000 people in South Africa out of work and about 30% of breweries in the country have been forced to shut their doors permanently.
“Given the material impact that this third ban on the sale of alcohol has on our business, and the possibility of further bans, we have no choice but to halt these investments for the foreseeable future,” SAB’s vice president of finance, Richard Rivett-Carnac, said in the statement.
The spending had been earmarked for upgrades to operating facilities, product innovation and new equipment at selected plants, the company said.
AB InBev, the world’s biggest brewer, acquired SAB as part of its takeover of SABMiller Plc in 2016. The South African company can trace its roots back to Johannesburg’s late 19th century gold rush, when it catered for thirsty miners.
SAB produces popular lagers Castle Lite, Hansa and Carling Black Label.