Reflections after years of liquor ‘wars’
The easing of the alcohol levy in 2018 was welcome relief for the liquor industry after years of struggle, before COVID-19 came with even more disruptions. But before the pandemic, liquor traders were struggling with a publicly unknown threat to their existence. Outgoing liquor sector chair, Mothusi Molokomme speaks to Staff Writer, MBONGENI MGUNI, on his years in the trenches
For those on the outside, the reduction of the alcohol levy in October 2018 seemed to finally provide much needed relief to an industry that had battled to stay afloat for a decade. At 55%, the alcohol levy had squeezed the life out of the industry, discouraging investments and expansions, while seeming to penalise Batswana for enjoying a product steeped in culture and history.
Unbeknownst to many, the reduction in the levy, while it did provide relief, actually came as the industry was facing yet another existential threat. For manufacturers, retailers, traders and the tens of thousands employed in the liquor sector, it may have appeared their industry was cursed.
“People don’t know we were already dealing with something quite huge in the background,” says Mothusi Molokomme, outgoing chair of the Botswana Alcohol Industry Association (BAIA).
“In mid-2017, the BURS came out and said they wanted to introduce a track and trace system that would have disrupted the industry to the point of almost closure.
“The system would have involved putting a tax stamp within each individual product of alcohol.
“The stamp would have cost 30 thebe each on a unit of alcohol and you can imagine someone producing six million units, what cost that would have brought.
“For producers, they would have had to set up a machine to do that with the associated capital expenditure.”
For the BURS (Botswana Unified Revenue Service ), the argument was that the country’s tax revenues in alcohol were slipping through illegally traded alcohol. The fear was that illegal alcohol, either imported undeclared or sold locally without tax declaration, was costing the taxman his dues. The stamp would ensure greater accountability and consequently greater returns to the taxman.
“In other countries in Africa, illegal trade is a major problem, accounting for up to 40% of alcohol, but in Botswana, between 95 and 98% of the alcohol sold can be traced already. “We fought this and showed that it was not even working for other countries.
“It was something that was self-defeating because it was expensive.
“The BURS insisted and we went to the Ministry of Finance in mid-2019 where the battle continued.”
The BAIA, which represents the country’s major producers and retailers of alcohol, is a battle-hardened organisation. Molokomme, a 12-year veteran of the industry, recalls the change in tide in the years leading up to the easing of the alcohol levy. At the height of the battle over the alcohol levy, doors slammed in the faces of the BAIA and their pleas for help went unanswered.
“I remember it would take quite a long time to pin down a meeting with the minister (of Investment, Trade and Industry) involved at the time,” he says.
“Around late 2018, the ministry became very much more open to our calls for discussions, to sit down, which was not the case previously. “Even before the current minister came into office, we used to engage with her as the permanent secretary and she knew quite a lot of things coming from the past. “She was also open at the time and would say ‘this we can do, this we can’t do.“We even had the assistant trade minister officiate at our AGM.”
Perhaps because of the improved relations, the dreaded track and trace initiative has been put on the backburner. However, it is more likely the issue lost steam as the country shifted its attention to the onset of COVID-19 in March 2020.
Even having anticipated disruption, the liquor sector found itself in the crosshairs of health strategists looking at reducing the spread of the virus.
“The first time, we closed for 60 days but even then, the open door at the Ministry was there although they did not have the power to do anything as that was with the task force.
“The situation pushed us to come up with workable solutions overnight and every time trade resumed, it was based on our presentations, even if they tweaked them.
“We had to quickly find ways of reaching our customers other than the traditional models.
“What we have seen now is the shift to “buy and go home” which is actually the proper way of doing things.
“We have seen campaigns even at the level of individual companies, to say ‘buy in bulk and go home’.
“Treat it like your grocery and go home. “The era of having people sit and gather around an outlet are gone.”
The Association introduced the #DinweleDladleng campaign to encourage alcohol consumers to drink at home and avoid congregating at outlets and in chill sessions. An online hotline was also introduced for whistleblowers to alert police on rogue boozers. With the latest resumption of alcohol sales, consumption has been statutorily restricted to homes, but even then, anecdotal evidence on social media suggests a small section of consumers is struggling to adhere.
“It’s about adaptation and doing things differently, but to be honest, habit and change is a process and you have to accept that,” Molokomme says.
“You have three percent not complying and 97% complying, but we know even that three percent can cause a problem.
“The industry needed to be upfront on the campaigns about drinking responsibly and how things should be done.
“Our Association, wholesalers and retailers who are not direct members, all got together in our campaigns and contributed part of the funds to the campaign as a united front.” Does this mean Botswana has a drinking problem, as some critics have said?
“When you speak of a problem, you must have scientific evidence and back up your assertion, otherwise that’s only an opinion. “We must understand the era we live in. The drinking culture is from time immemorial, but the dynamics have changed.
“For example, there were fewer vehicles on the roads during that time, and now you have 70 times more on the same roads, meaning the risk is higher.
“It’s not about whether it was right then, or now, but the context is important.
“Social media is also a major factor. People had those events before, but now there is more exposure.
“At UB back in the days, people would drink everywhere in groups, but now there’s ways of exposing this. It’s good to expose, but does that mean the bad has increased?”
Molokomme also believes the liquor industry needs more defenders. He says whenever the liquor industry is discussed in public, such as on national radio, the first and loudest voices are of those opposed to alcohol sales, while others, including workers and consumers do not stand up and speak for the industry.
“We need those voices that come forward and say ‘this is who I am. I have three children who depend on my employment in this sector’.
“When people see the industry open, they only think of consumers and not employees. “The view we want when the industry is open is of that truck going up the road, someone getting their job back and families being provided for.
“Government checks the pulse of the country and they act on this feedback. We have to act accordingly and that’s one of the things I have been passionate about.”
After his 12-year tour of duty in the alcohol sector, Molokomme says his departure is not because he is exhausted with the sector’s running wars. Rather, he is ready for a new challenge as the managing director of G4S Botswana, but says he will not be totally lost to the liquor sector.
“I remain on the committee of the Gaborone Liquor Control Board until next year.”