AB InBev Warns of Beer Production Risk Due to South Africa's Energy Crisis

Key Highlights :

1. SA is suffering from an increasing deficit in power generation capacity, resulting in electricity rationing that has resulted in businesses and households running without power for up to 12 hours a day.

2. This has had a negative impact on the productivity of businesses, with AB InBev warning that the poor state of electricity generation is hitting its ability to produce beer.

3. The electricity shortages cost businesses a half a billion rand in Pick n Pay's recent financial year, while they cost SA's biggest grocer, Shoprite, more than R560 million in diesel costs in their first half alone.

4. Load shedding costs Tiger Brands about R1.5 million a day at Stage 6 load shedding.

     The energy crisis in South Africa is a pressing issue that is posing a risk to beer production for global beer producer Anheuser-Busch InBev (AB InBev). The company's South African Breweries CEO, Richard Rivett-Carnac, has expressed his concern over the negative impact that electricity and water shortages have on the company's productivity. Without water and electricity, beer production would be impossible, and the recent electricity rationing and load shedding have already caused significant losses for businesses and households.

     The electricity shortages in South Africa have been a problem since 2007, and the current Stage 6 load shedding means that businesses and households are running without power for up to 12 hours a day. This has had a huge financial impact on companies such as Pick n Pay and Shoprite, with Pick n Pay claiming the government's inaction in solving the structural problems caused by inadequate investments in infrastructure for public services such as electricity production has cost them around half a billion rand in their recent financial year. Shoprite has also reported costs of more than R560 million in diesel costs in its first half alone.

     Tiger Brands has also been affected, with the company reporting costs of R1.5 million a day at Stage 6 load shedding. AB InBev has adopted a polite and public relations stance in response to the crisis, and is encouraged by the work the government is doing to address the energy and resource challenges. The company is also supportive of initiatives that help maintain the continuity of operations, prevent losses, and support economic growth.

     The energy crisis in South Africa is a pressing issue that needs to be addressed in order to protect businesses and households from further losses. AB InBev's warning of the risk to beer production is a reminder of the need for a sustainable solution to the energy crisis. Without a reliable source of electricity and water, businesses such as AB InBev will struggle to remain productive and profitable.

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