
THIS ISSUE: 02 Apr - 08 Apr
Well played, Jameson, although sending out your press release before April Fool’s Day is a diabolical move at best, and very possibly in contravention of the timeless conventions that govern the ancient holiday of April 1st. But oh, how we coveted that mythical whisky-scented beard oil, so we did. Couple of cracking stories about taxation down below, one to do with Massmart, which we can make neither head nor tail of, and one to do with SARS itself. Enjoy the read.
RETAILERS AND WHOLESALERS
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Checkers Hunters and Gatherers – of market share! (Boom.)
Straying further into the territory staked out by Woolies, and to a lesser extent by Pick n Pay, is Checkers, with the launch of its deli-inspired ‘Forage and Feast’ range. Products are sourced from “the best suppliers and artisans”, says Checkers, with provenance front and centre in range development, and seasonality driving ingredient sourcing. The range has cracked the (presumably well-remunerated) endorsement of SA’s first Michelin chef Jan Hendrik van der Westhuizen and includes in its first outing Sicilia passata sauce made with Datterino tomatoes, handmade fruit preserves, vinegar made from Italian Prosecco, an assortment of locally-crafted vinaigrettes, olive oil from the Breede River Valley, gourmet stone baked pizzas and ready-to-cook roasts. More products and categories will follow in the months to come.
Comment: Further innovation from the Shoprite Group, which (as we may have observed) is on an absolute tear right now.
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Massmart Death, taxes, and executive share schemes
A slow news week, so what better time to dive into Massmart’s arcane wrangling with SARS over who exactly carries the can for loses on an employee share option scheme. Follow closely now, it’s going to get tax-ing. (Oh, come on. Ed.) Turns out that 20 years ago, Massmart set up a trust through which it would channel share transactions for key management who were offered call options on Massmart shares that vested over the course of years. When the time came to settle up, the trust could buy shares on the JSE, allowing the participants to cash out their shares, something 90% of them apparently chose to do. But the devil, you see, was in the details: Massmart would ‘loan’ cash to the trust that was never intended to be repaid, and (OK we’re lost) when Massmart exercised its right to have the trust use this cash to buy the shares, a capital gains loss would somehow result, according to Massmart. To which SARS has responded, “nice try sunshine”, leaving Massmart in the can for taxes on almost a billion South African rands it had hoped to claim as a write-off.
Comment: Or something. Moral of the story is, don’t.
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International Retailers Barbarians at the gates
Amazon has found a use for all those empty shopping malls in the US, caused by, erm, Amazon. They’re going to turn them into fulfilment centres, which will enable them to yes, that’s right, kill more malls! Not a joke, or speculation: from 2016 to 2019, Amazon converted around 25 shopping malls, and is reportedly in talks with Simon Property Group, the country’s biggest mall owner, to convert bankrupt JCPenney and Sears department stores into Amazon DCs. In news not unrelated, Ocado (Is it a retailer? Is it a robot?) have reported an increase in sales to the tune of a whacking +40% over the past three months to £599 million sterling, with orders ticking inexorably upward at the rate of +2.5% per week. In February it opened its first mini warehouse in Bristol staffed substantially by robots, as it happens, and more are to follow. It is also rolling out a one-hour ‘Ocado Zoom’ service and is looking at rolling out refrigerated electrical and pedal powered vehicles to serve those difficult to reach spots sustainably.
Comment: Truly, we are living in a time of wonders. And warehouses.
MANUFACTURERS AND SERVICE PROVIDERS
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Nestlé Smart move
Nestlé’s beloved SMARTIES brand, you will be delighted to hear, now comes in 100% recyclable paper packaging – an initiative that has been rolled out globally and now finds its way to our rocky shores. “Nestlé SMARTIES’s move to 100% recyclable paper is a great advertisement of our dedication to transforming our packaging to be more environmentally friendly,” says the impeccably named and even more perfectly hyphenated Saint-Francis Tohlang, corporate communications and public affairs director at Nestlé East and Southern Africa Region. “It encapsulates all that the initiative represents: rethinking our entire value chain, reducing our impact on the environment and providing tangible proof points of our sustainability efforts through our loved brands,” he says. And, this being 2021, the launch has a social component: ‘#SmartiesCreateWithPurpose’ is aimed at getting South Africans to buy into the idea of getting creative with recycling while being environmentally aware.
Comment: Nice one, that staple of every happy childhood.
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Liquor A dry season
After a year of restrictions and bans and lockdowns South Africa’s liquor industry has had just about enough. They’ve lost 19 weeks of trading over the last year, at the cost of an estimated R36.3bn in sales, 200,000 something jobs have been put at risk, and R29bn lost in tax revenues. And they cannot for the life of them see why the Government banned off-site consumption over the Easter weekend just gone. Sibani Mngadi, chairperson of the South African Liquor Brandowners Association, “Our constant call is for government to share the data that they base their decisions on, with the objective of understanding the science behind the decisions so that we can find other ways, in future, to limit the spread of the virus while protecting the livelihoods that are supported by our sector,” he says, fairly. Particularly hard-hit have been craft breweries and privately-owned wineries.
Comment: A terrible year for an iconic industry, which may yet emerge from the ordeal better and stronger.
TRADE ENVIRONMENT
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Tax Death, taxes, and … more taxes?
Pity the poor old South African Revenue Service. Forced to revise its collection target to a razor thin R1.112tr because of COVID-19, it ended up instead only raising… wait, that can’t be right… R1.25tr? Thus exceeding the target by a very tidy R63m. This includes R12bn from very big businesses, and R16bn from provisional taxpayers. And for those of you concerned that SARS will not be able to extract from you every last farthing you owe the fiscus, good news: according to the Minister of Finance, “Marshall” Tito Mboweni, SARS will be improving its technology, data and machine learning capabilities in this financial year, and has your number, and you mom’s number, and your mate from Grade 3’s number too. And if you were concerned that he would turn out dodgy, well, SARS has been given a budget of R1.8bn by the Justice and Constitutional Development department to root out corruption in its own ranks and among crooked taxpayers.
Comment: It really is nice to find a little extra behind the sofa cushions just when you need it most.

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