Will liquor laws sti­fle econ­omy?

Weekend Argus (Saturday Edition) - - FRONT PAGE -

MON­DAY is the dead­line for com­ment sub­mis­sions on pro­posed amend­ments to the Liquor Act 59 of 2003. The amend­ments, pro­posed by the Depart­ment of Trade and In­dus­try, are well-in­ten­tioned, but need to be more bal­anced to pre­serve an in­dus­try vi­tal to the econ­omy.

The changes are de­signed pri­mar­ily to bring un­reg­u­lated liquor trade un­der con­trol, curb the grow­ing so­cio-eco­nomic ef­fects of al­co­hol abuse, up­hold em­pow­er­ment re­quire­ments and build ca­pac­ity for en­forc­ing com­pli­ance.

It pro­poses ex­cise du­ties be in­creased. Many con­sumers are price sen­si­tive so by mak­ing liquor more ex­pen­sive, the gov­ern­ment hopes to dis­suade ex­ces­sive con­sump­tion.

How­ever, al­co­holics and al­co­hol abusers are not as price sen­si­tive and will al­ways find a way to ob­tain liquor. They’ll ei­ther sac­ri­fice es­sen­tials or deal through the black mar­ket.

Ed­u­ca­tion and ac­cess to in­ter­ven­tion is what’s needed. The Na­tional Trea­sury dis­cus­sion doc­u­ment is­sued in May 2014 says: “So­cial problems aris­ing from ex­ces­sive al­co­hol con­sump­tion might be ex­ac­er­bated if sharp in­creases in ex­cise duty re­sult in some drinkers turn­ing to un­safe il­licit prod­ucts.

“Al­co­hol tax in­creases may also give rise to un­in­tended shifts in con­sumer be­hav­iour… that could un­der­mine gov­ern­ment’s health ob­jec­tives. The ef­fec­tive­ness of al­co­hol tax pol­icy de­pends on the ex­tent to which al­co­hol tax­a­tion dis­cour­ages ex­ces­sive al­co­hol con­sump­tion and its im­pact on the econ­omy and il­licit trade.”

Let’s not for­get that this bustling in­dus­try is a sig­nif­i­cant player in the coun­try’s econ­omy. Ac­cord­ing to the Na­tional Trea­sury re­port, the liquor sec­tor con­trib­uted an es­ti­mated R73 bil­lion for fis­cal year 2009/2010, or 2.9 per­cent of South Africa’s GDP.

The same re­port in­di­cates it sus­tains an es­ti­mated 522 000 em­ploy­ment op­por­tu­ni­ties. It’s true nu­mer­ous reports have shown a cor­re­la­tion be­tween drink­ing and vi­o­lent crime, traf­fic crashes, do­mes­tic vi­o­lence and other so­cial problems. But to what de­gree these are mit­i­gated by re­duc­ing al­co­hol con­sump­tion and which com­mu­ni­ties ben­e­fit from across-the-board re­stric­tions varies from study to study.

By no means is the sug­ges­tion be­ing made that so­cial in­sta­bil­ity or the loss of life be ig­nored in favour of rev­enues. But is clamp­ing down on an in­dus­try that does far more good the best way to ad­dress the prob­lem?

Surely a bet­ter so­lu­tion is to bol­ster pro­grammes that ed­u­cate the pub­lic on good drink­ing habits and the dan­gers of abuse, and of­fer sup­port to those in need of re­ha­bil­i­ta­tion. Such pro­grammes should tar­get the abuser’s rea­sons for drink­ing ex­ces­sively rather than the act it­self.

Of greater merit are the amend­ments de­signed to bring un­der con­trol the il­licit pro­duc­tion and dis­tri­bu­tion of liquor.

Peo­ple from other fields will be des­ig­nated as in­spec­tors act­ing on be­half of the Na­tional Liquor Reg­u­la­tor. These in­clude po­lice of­fi­cers, traf­fic of­fi­cers, health and safety in­spec­tors, med­i­cal in­spec­tors and oth­ers. Al­though they’ll need train­ing as pre­scribed by the Min­is­ter, they’re in a prime po­si­tion to carry out checks dur­ing the course of their du­ties. In this way, the law hopes to build the re­quired ca­pac­ity for en­force­ment.

With these re­sources, un­li­censed out­lets can be iden­ti­fied and brought to book. Such busi­nesses not only fuel abuse by sell­ing to al­ready drunk or un­der age cus­tomers for the sake of profit, but also con­trib­ute noth­ing in the way of ex­cise. The pro­posed amend­ments would see greater re­quire­ments on sup­pli­ers to en­sure they are sell­ing to li­censed traders or they will be held equally ac­count­able for claims re­sult­ing from liquor­re­lated in­ci­dents.

The pro­posed amend­ments also sug­gest an in­crease of the le­gal drink­ing age from 18 to 21. We re­gard a per­son on his 18th birth­day as an adult that can drive a ve­hi­cle, vote, en­ter into con­tracts, get mar­ried and even get a firearm li­cense, but this would mean such a teenager can’t pur­chase or con­sume al­co­hol.

This proposal is un­likely to suc­ceed, and if it did, is more likely to force 18- to 21-year-olds to seek al­co­hol in il­le­gal man­ners.

The in­ten­tion of the law is good, but over­all it puts a vi­tal eco­nomic con­trib­u­tor in dan­ger as well as en­dan­ger­ing the jobs of work­ers who de­pend on this in­dus­try.

The DTI should closely mon­i­tor the ef­fi­cacy of this new leg­is­la­tion, and adapt their ap­proach to solve the very real problems while con­sid­er­ing the knock-on ef­fect on na­tional con­cerns.

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