THE MINISTER OF TRADE AND INDUSTRY, DR ROB DAVIES, SPEAKING NOTES: EASTERN CAPE PROVINCIAL LIQUOR INDUSTRY SUMMIT, 06 MARCH 2017.
Pre 1994, the economic benefits of the liquor industry were of greater importance to the regime than the social well-being of the majority of the people of South Africa. By then, the benefits of the liquor trade were not balanced with the negative effects of liquor use. It was therefore deemed fit in the democratic South Africa to ensure that economic and social policies are balanced to address the benefits of liquor trading and the harmful effects of liquor use.
Liquor has unwanted consequences if its production, distribution and consumption are not properly regulated. The recent study by Goldstein (2015) stated that South Africa has some of the worst drinking habits in the world. While only 60% of South Africans drink alcohol-higher than the worldwide average of 52%- the level of alcohol consumed amounts to each citizen drinking between 10 and 12.4 litres of pure alcohol per year. Worldwide consumption is, on average, 6.2 litres.
South Africa has one of the highest rates of foetal alcohol syndrome (FAS) in the world. FAS have also reached endemic proportions in some parts of the country. The Western Cape, Northern Cape and Gauteng are reported to have the highest FAS prevalence in the world. The level of alcohol abuse in the country resulted in the establishment of the IMC by the President in 2010 tasked with coordinating government interventions to combat substance abuse.
the dti has made some strides in addressing the socio-economic harms associated with liquor abuse. In February 2015, the National liquor norms and standards were published for implementation. The purpose of the norms and standards inter alia is to ensure that liquor regulation and practices in the Republic are harmonised; ensure consistency in the application of the liquor laws throughout the Republic; and to reduce socio-economic and other costs of alcohol abuse by reducing access and availability of liquor. The norms and standards addresses issues within current legislative framework such as standards necessary for harmonisation of legislation; age verification; licensing conditions; structural requirements and trading hours.
Further, on 30 September, 2016, the National Liquor Policy and the Liquor Amendment Bill were published following Cabinet’s approval. The policy was published for information whilst the Bill was published for public consultation. The objectives of both the policy and the Bill are to addresses the socio-economic impact of liquor abuse and the slow pace of transformation.
The following are policy position aimed at ensuring that the objectives of the policy and the Bill are addressed:
• Increasing the legal drinking and purchase age from 18 to 21;
• Restricting advertising, for example, by ensuring that liquor adverts are aired around 22:00- 06:00; remove content appealing to youth in alcohol advertising such as using of sport stars and models, and counter advertisement which identifies the harmful effects of liquor abuse;
• Liquor premises should be located at least five hundred meters (500m) away from schools, places for worship; recreation facilities, rehabilitation or treatment centres, residential areas; premises attached to petrol service stations, etc;
• regulating trading hours when liquor sales should be permitted;
• Introducing liability for manufacturers and distributors to ensure that they take responsibility not to supply their products to unlicensed traders; and for legal traders not to serve liquor products to already intoxicated persons. In both instances, the burden of proof will shift from state to the respondent who is operating contrary to the rules and regulations;
• Intensifying education and awareness about the dangers or harmful effects of alcohol abuse; and educating licence holders (manufacturers, distributors and retailers) on the Liquor legislation in order to comply and avoid irresponsible trading;
• Harmonisation of the provincial liquor legislation with the Liquor Act, 2003;
• To address the issue of transformation, the NLR need to strictly impose and monitor licensing conditions as articulated in the Broad- Based Black Economic Empowerment (B-BBEE) Codes of Good Practice;
• For more effectiveness in regulating macro manufacturers and distributors, the NLA is repositioned to become a National Liquor Regulator (NLR); and
• To improve the effectiveness of Council, the National Liquor Policy Council must be empowered to take binding decision in the third meeting, whether the meeting reaches a quorum or not.
The Bill was thereafter amended as follows:
• Section 9 of the Act is amended to provide for more restrictions on liquor advertising following the support of the provision. Liquor advertising is prohibited on social media, cinemas, print media, internet, and billboards placed less than 100 meters from educational institutions. The Minister is empowered to prescribe time slots for television and radio airing of alcohol adverts; and harmful effects of alcohol abuse. This will be done after consultation with relevant government departments and municipalities.
• Section 10 of the Act is amended to prohibit the supply of liquor or methylated spirits to persons under the age of 21, however, persons of 18-20 years may be employed in the liquor industry. Further, the licensee, or any person dispensing liquor must request a formal form of identification to verify the age before liquor is being sold or supplied. The increasing of age was supported in six provinces where face to face consultation took place, some NGOs and liquor consultants. North West, Northern Cape and Gauteng, some of the industry members and received written input are not in support of the increase of drinking age arguing that it is unconstitutional. It is becoming clear that the issue of health need to take precedence over business interests. Increasing drinking and purchase age is also supported by the World Health Organisation (WHO) and Medical Research Council (MRC).
• Section 13 is amended to ensure that applicants comply with the B-BBEE level to be prescribed by the Minister. Further, the Minister is empowered to prescribe the level of compliance to be met by applicants and registrants. Should the registrant fail to comply with the prescribed level, the NLR is empowered to cancel the registration in terms of section 20(4) of the Act. This provision was supported; however, the industry and some received written input propose that registrants be provided with the transitional period for compliance.
• Section 13A is inserted to provide for auxiliary conditions of registration. The National Liquor Regulator (NLR) must ensure that no registration is granted in areas or premises not zoned for purpose of trading in liquor in terms of the applicable town planning scheme, premises attached to petrol service stations, premises situated five hundred (500) metres away from public transport facilities and educational institutions. Where application is in mixed-used areas, the registrants need to comply with norms and standards and registration conditions imposed by the NLR. This provision was supported by members of the communities and NGOs arguing that these outlets cause noise and nuisance in the communities and proposed that they need to be given a transitional period to move out of the said areas. Those against this provision argued that this provision falls within the provincial and municipal mandate as per schedule 4B and 5A and the 1998 Constitutional court ruling. It was further argued that this rule will be difficult to enforce particularly in urban and semi-urban areas.
• Section 34A is inserted to provide for criminal and civil liability to manufacturers and distributors who distribute liquor to unlicensed premises. The manufacturer, distributor and unlicensed person will be jointly and severally liable for any harms or damages caused as a result of the supply of liquor to unlicensed premises. Further, manufacturers, distributors and legal traders will be severally and jointly liable for any harms and damages caused as a result of supplying liquor outside trading hours. The burden of proof will shift from the state to the responded. The idea behind the provision is supported by some of the industry members, however, it was indicated that it will be difficult to enforce. Members of the community support the provision.
• The provisions on the repositioning of the National Liquor Authority to be a National Liquor Regulator (NLR); stabling the Internal Review Mechanism; and the quorum with regard to National Liquor Policy Council were basically supported.
It is submitted that both the policy and Bill will effectively address all the issues raised as gaps and challenges affecting the implementation of the liquor legislation in the country.