New study to quantify cost of liquor bill

The National Economic Development and Labour Council (Nedlac) has commissioned a new socioeconomic-impact assessment of the Liquor Amendment Bill.

The council was dissatisfied with the impact assessment presented by the government because it did not quantify the likely effects of the bill’s controversial measures on jobs, advertising revenue and the industry.

The study by the Department of Planning, Monitoring and Evaluation conceded that the bill would result in a loss of advertising revenue and tax revenue but it did not attempt to calculate the costs. It also did not estimate the cost to the state of the harmful effects of alcohol abuse.

Department of Trade and Industry chief director of policy and legislation MacDonald Netshitenzhe confirmed further research would be undertaken but stressed this would not replace the government’s socioeconomic-impact assessment.

Research firm Genesis Analytics will do the new study.

Netshitenzhe said the study was expected to be completed by the end of September, possibly delaying the submission of the bill to Parliament. However, he believed it could still be tabled in Parliament in 2017. If not, it would be tabled early in 2018.

The South African Liquor Brandowners Association welcomed Nedlac’s decision to have an impact study done. “We believe the study will assist all stakeholders with interest in and/or authority to approve the bill to have an informed view of each of the proposals in the bill,” spokesman Sibani Mngadi said.

The industry body was critical of the government’s “vague” impact assessment because of its failure to quantify the effect of the draft bill on jobs and the economy. This limited the ability of Nedlac social partners to engage meaningfully.

Trade unions also pushed for a study to get a sense of the impact of the bill on jobs.

The bill’s proposals include restrictions on advertising alcoholic products including a ban on ads in newspapers; a prohibition on trading licences for alcohol outlets within 500m of churches and schools; raising the legal drinking age from 18 to 21 years; and holding brand owners legally liable for damage caused by alcohol consumption.

The liquor industry estimates these restrictions will cost the economy R2.38bn, with television losing R1.9bn, radio R160m, and print R260m.