“No, no,… we are going to court not because we feel we have nothing to lose. Quite to the contrary, really. We are going to court because we have everything to lose. We do not agree with the government decision-making process. We know a lot more about covid-19 today than was the case a year ago. Our belief is that all decisions should be based on data and evidence,” says Brenno Kliger-Diaz, the Managing Director of Kgalagadi Breweries Limited.
Throughout the interview, this is a mantra that Kliger-Diaz keeps falling back onto – either to preface a sentence or to complete another.
At one point tears are visibly running down his cheeks. He is a man struggling to keep Kgalagadi Breweries afloat.
Over two hundred thousand livelihoods in Botswana trace their being to how well he executes his mandate. Even during the best of times, it is not an easy task.
And these are not by any stretch the best of times.
About two ago an order from government announced a total and blanket ban on alcohol trade, the fifth such restriction on alcohol since Botswana imposed a State of Emergency over twelve months ago.
The ban is not time framed. It is indefinite, open-ended and wholesale.
When it happened, the order caught many by surprise, including Kliger-Diaz who says there was no hint of even a heads up from government.
It came at a time when KBL was most unprepared.
“There was no consultation, no communication either before or after the ban,” says Kliger-Diaz, struggling to contain the tears.
The latest decision has pushed KBL management to the brink.
They have decided to go to court to challenge the government decision making processes.
KBL, Kliger Diaz hazards more than once during the interview, is the only alcohol trader that has a presence across the entire value chain in the Botswana market. Competitors are servicing Botswana from outside.
He does not say go that far, but the implication is clear he means that the company deserves some respect, not least from government to who the company pays tax.
The fact that the banning order is indefinite makes it even harder for KBL to plan or make decisions.
Three days after the banning order was issued KBL had already shut down two Chibuku plants – one in Gaborone and the other in Francistown.
The extent of the losses immediately became apparent.
KBL is a non-stop business.
Production is done in cycles. A decision taken at one stage of production has direct consequences on the entire cycle.
“You cannot just turn on and off like it’s a switch. It is a cycle. It has to be all working. Or there are hazards,” says the KBL Managing Director.
But there is a rub; Chibuku expires in five days. It cannot be stored in a warehouse.
An abrupt decision by government meant that trucks delivering the product all over the country were immediately called to bring stock back – not for storage but for destruction.
Trucks that were loading were halted. All of the staff working at the Chibuku plants – close to 200 hundred of them have been sent home. Not even the Managing Director knows for how long.
The situation was somewhat different with clear beer. Up to now the plant is still running, but nowhere near the full scale. Kliger-Diaz makes it clear that it will not be long before it too, is stopped.
The Managing Director says right now they are too busy monitoring plant operations.
And it will take a while to count the losses.
That only tells half the story.
Kliger-Diaz is most concerned by KBL position within the production zone of the overall group.
Botswana, he says has remained an important market. That has largely been a result of overall attributes the country has attracted, including consultation and investor friendliness.
KBL is owned by AB-InBev a global behemoth of a brewer with a presence across the world.
With what has been happening in Botswana, across the group, confidence over KBL is at its lowest.
Botswana, he emphasizes has always been an important market.
Yet today Botswana is the only country where they are operating under a total ban.
“We are a relevant market. But the group is taking a hard look at us. They are making adjustments to depend less on Botswana results. We do not know what will happen in the future. But I can assure you that for me it will be hard to get investments. That is because with time the group will want to review its business model on Botswana as a way to reduce risk,” says Kliger-Diaz.
There was a time not so long ago when it was literally impossible for a business leader to speak of Botswana and risk, especially political risk all in one sentence.
Covid has sent many things into a tailspin.
Over the recent past he says he has watched as within the AB-InBev Group he has been quietly shunted off the conversation by his colleagues when topics moved towards growth of business and new investments.
Could the situation have been managed any better?
“We think so,” he says as a matter of fact. “And we are not happy with how things have gone. And we do not agree with government. That is why we have gone to court. For us going to court is a clear sign of commitment to this country. If we were not committed we could easily have opted an easy way out like serving this market from elsewhere,” he says.
As lawyers on government and KBL sides are busy preparing for a bruising battle in court, Kliger-Diaz is under no illusion that at one point the owners of the business will have to make tough decisions.
The legal route was taken as a last resort.
“This is the fifth ban in just over a year. We are here until further notice. It is taking its toll. Obviously, we do not agree with the way decisions are being taken. Our view is that decisions have to be made considering the proportionality of the situation. The reason why we have gone to court is want to protect the business and its future investments.”
To those who doubt KBL long commitment to Botswana, he says the company has a lot to lose by leaving. They want to stay because they are absolutely convinced they can grow from here., says the Managing Director.
If that was not so, KBL would do like all their competition, which is to enter this market from outside. But there is another side of the caliculus to be considered.
“The size of business has to be justified by revenue. Do we need all the capacity that we have under the circumstances? Ï do not know. All I can tell you is we need more stability at the moment,” he says.
He is convinced that if there had been communication and consultation, especially now because KBL is the only industry that was affected things would have been so much different.
“We could have listened to the government views and made our own suggestions,” he says.
Kliger-Diaz makes it clear that KBL supports government restrictions as a result of Covid-19, but insists that such decisions should be based on data and empirical evidence that are all science based.
Anything else smacks of emotions.
“We don’t agree with a full ban. We support restrictions. Our families are here. Its not like they live abroad. We know the impact. We are affected too.”
Tears are beginning to show again on Kliger-Diaz’s face.
“You know KBL is my family. We are one big family here,” he says.