Alcohol Ban Leaves Sechaba In Severe Hangover

  • P33 million in taxes lost
  • 39% decline in liquor sales projected


The ban on sale of alcohol is throwing those in the alcohol industry into deep financial trouble, The Botswana Gazette has established. At the Botswana Stock Exchange, the current share price of giant brewer Sechaba Brewery Holdings has deteriorated and has stood at P20.65 since December after a slide that had begun in May as Botswana’s first lockdown that was countrywide and the ban on alcohol took hold.

The share price of the company that has majority shareholding in Kgalagadi Breweries Limited (KBL) was P22.01 in October 2019 and the company seems headed back to its struggling days of 2017/18, thanks to the current ban on alcohol.   

This is the company whose market capitalisation currently stands at P2.28 billion compared to P2.44 billion in May 2020. The decline is likely to be due to the current ban on booze. Market capitalisation is the total value of a company’s shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares.

The alcohol ban and lockdowns have impacted Sechaba’s financials since last year when the company’s financial results for the six months ended 30 June 2020 showed that its major subsidiary, KBL, recorded profit after tax of P48.8 million, a 69 percent fall from P156.4 million registered in the corresponding period in the prior year.

The 30 June 2020 financials also showed that KBL paid P6.9 million in tax compared to the P39.9 million paid in the same period by 30 June 2020, almost P33 million less tax in less than four months due to interventions to curb the spread of COVID-19.

The country’s biggest beer maker has now recorded a decline of 39 percent in volumes sold as a result of the ban and more lockdowns, details which should reflect in Sechaba’s full year financial results in the coming weeks.

Sechaba Brewery Holdings Limited is an investment holding company with a 60 percent controlling interest in KLB and Botswana Breweries (Pty) Limited. Kgalagadi Breweries produces lager beers, traditional beers, bottled water and soft drinks under licence.

The brewery has four traditional beer breweries, a clear beer brewery, a sparkling soft drinks production plant and six sales and distribution centres in Botswana. SABMiller has a 40 percent stake in Kgalagadi Breweries and has management control over the operation, offering manufacturing and technical expertise, brand building and distribution expertise.

Botswana Breweries produces traditional opaque beer made from sorghum and maize under the brand names of Chibuku and Phafana. The Botswana Development Corporation has a 25.6 percent shareholding in Sechaba Breweries Holdings Limited.