Al­co­hol ad­verts ban ‘will not ban­ish thirst for booze’

Business Day - - IN-DEPTH - Nick Hed­ley hed­leyn@busi­

Aban on liquor ad­ver­tis­ing would strip broad­cast­ers of a con­sid­er­able source of rev­enue and prob­a­bly dent the strug­gling South African economy, but would do lit­tle to com­bat al­co­hol abuse, ex­perts say.

As part of its ef­forts to curb the mis­use of al­co­hol, the gov­ern­ment is con­sid­er­ing the Liquor Amend­ment Bill, which could re­sult in a ban on al­co­hol ad­ver­tise­ments on tele­vi­sion and ra­dio be­tween 6am and 10pm. The bill also in­cludes a pro­posal to lift the le­gal drink­ing age from 18 to 21.

The De­part­ment of Trade and In­dus­try (DTI) ar­gues that the in­ter­ven­tion is nec­es­sary since SA is among the big­gest con­sumers of al­co­hol in the world, while foetal al­co­hol syn­drome rates are the high­est glob­ally.

The state spends nearly R4bn a year on tack­ling prob­lems re­lated to al­co­hol abuse, and ac­cord­ing to the DTI’s sub­mis­sions, stud­ies show that rais­ing the con­sump­tion age could be an ef­fec­tive tool to com­bat this.

How­ever, if they go ahead, the ad­ver­tis­ing reg­u­la­tions would take a bite out of the lo­cal economy, ac­cord­ing to Jo­hannes Jordaan, economist at Eco­nomic Mod­el­ling So­lu­tions, who says there is no clear link be­tween al­co­hol con­sump­tion and ad­ver­tis­ing spend.

How­ever, the ef­fect would not be as sig­nif­i­cant as a to­tal ad­ver­tis­ing ban, which the Health Min­is­ter Aaron Mot­soaledi has punted.

Ac­cord­ing to an ear­lier re­port by Jordaan and a group of re­searchers at Econometri­x, a to­tal ban would shrink the economy by 0.28%. That in­cludes lost ad­ver­tis­ing ex­pen­di­ture and re­duced spon­sor­ships for the sports and events in­dus­try. Cas­tle Lager, for in­stance, spends sig­nif­i­cant amounts on spon­sor­ing rugby, cricket and foot­ball tour­na­ments and teams.

Sibani Mn­gadi, chair­man of the South African Liquor Brandown­ers As­so­ci­a­tion (Salba), said that with no me­dia ex­po­sure “there will be lit­tle to no in­cen­tive to spon­sor sports events or teams”, al­though it was un­clear whether the rules would ap­ply to in­ter­na­tional events. It was even un­cer­tain whether lo­cal tele­vi­sion sta­tions would be al­lowed to broad­cast all 2018 Fifa World Cup matches, as the foot­ball tour­na­ment was spon­sored by Bud­weiser, he said.

The tele­vi­sion in­dus­try would feel the brunt of the ban more than other me­dia seg­ments, ac­cord­ing to mar­ket­ing and me­dia an­a­lyst Chris Mo­erdyk, who heads up a me­dia in­dus­try task group on the mat­ter.

“Tele­vi­sion sta­tions would cer­tainly lose quite a lot of money — when you look at how much South African Brew­eries (SAB) spends on ad­ver­tis­ing, the bulk of their spend is on TV com­mer­cials,” Mo­erdyk said.

A study for the Na­tional Eco­nomic De­vel­op­ment and Labour Coun­cil (Ned­lac), done by re­search firm Gen­e­sis An­a­lyt­ics, said ban­ning al­co­hol ad­ver­tis­ing be­tween 6am and 10pm would slash ad­ver­tis­ing agen­cies’ rev­enues by R400m while the me­dia would take an R800m hit — par­tic­u­larly tele­vi­sion broad­cast­ers.

Ac­cord­ing to Mn­gadi, an irony in the pro­posed changes is that the Liquor Amend­ment Bill re­quires trans­for­ma­tion and di­ver­si­fi­ca­tion in the in­dus­try, and yet the ad­ver­tis­ing ban would turn out to be an im­ped­i­ment to new­com­ers.

In­stead of re­strict­ing mar­ket­ing, he said stricter law en­force­ment, in­clud­ing the manda­tory use of iden­ti­fi­ca­tion to buy al­co­hol, tar­get­ing ad­verts at adults only and al­co­hol aware­ness cam­paigns were bet­ter op­tions. “Our in­ten­tion is to in­crease spend from R10m to R150m per an­num on these pro­grammes.”

Cit­ing re­search by Gen­e­sis, Mn­gadi said this “more holis­tic ap­proach” would be a bet­ter way to deal with al­co­hol abuse.

Wine ex­pert Michael Frid­jhon said, as was the case when cig­a­rette ad­ver­tis­ing was banned, the bill would en­trench the dom­i­nance of the largest al­co­hol brands and pre­vent new en­trants from gain­ing a foothold in the mar­ket.

The large il­licit al­co­hol and drugs mar­ket showed that ad­ver­tis­ing did not drive con­sump­tion and al­co­hol abuse.

“There’s a very sim­ple test: how much ad­ver­tis­ing do the drug mer­chants do? So the prob­lem is not one of li­cens­ing, the prob­lem is one of polic­ing. There’s am­ple leg­is­la­tion but in­ad­e­quate polic­ing.”

In­stead, the gov­ern­ment should fo­cus on ed­u­ca­tion and the en­force­ment of ex­ist­ing rules, he said.

But if the le­gal drink­ing age was raised to 21, “you can’t be­gin to ed­u­cate kids at school be­cause they’re three to five years off the drink­ing age”.

Al­co­hol abuse rates are higher in coun­tries with more pro­hi­bi­tion on drink­ing, ac­cord­ing to Frid­jhon. For in­stance, the US raised the drink­ing age in the mid-1980s to re­duce road ac­ci­dents caused by in­tox­i­ca­tion.

But re­search in the Jour­nal of the Amer­i­can Acad­emy of Child and Ado­les­cent Psy­chi­a­try shows that binge drink­ing in the US among young adult males has not de­clined, while binge drink­ing among non-col­lege women has ac­tu­ally in­creased by 20%, and among col­lege women by 40%.

How­ever, the Gen­e­sis re­port takes a dif­fer­ent view, say­ing young peo­ple ex­posed to al­co­hol ad­ver­tis­ing are more likely to start drink­ing ear­lier and drink more.

Martin van Staden, le­gal re­searcher at the Free Mar­ket Foun­da­tion, said rais­ing the drink­ing age was “con­de­scend­ing and tyran­ni­cal” and would not work.

“Peo­ple the gov­ern­ment deems ma­ture enough to vote, marry freely, choose ca­reers, drive cars and en­ter into con­tracts will no longer be al­lowed to drink with friends or at a meal or even at their own wed­dings if this bill is adopted,” Van Staden said.

Mean­while, one an­a­lyst, who asked not to be named, said large bev­er­age pro­duc­ers may be able to keep their brand aware­ness alive by launch­ing al­co­hol-free ver­sions of their prod­ucts and ad­ver­tis­ing, or spon­sor­ing sports teams with those prod­ucts.

SAB and AB InBev Africa launched Cas­tle Free in Oc­to­ber 2017, and “oth­ers would prob­a­bly climb on the band­wagon”, the an­a­lyst said.

Nirishi Trikam­jee, cor­po­rate af­fairs di­rec­tor at SAB and AB InBev Africa, said SAB was work­ing with rel­e­vant gov­ern­ment de­part­ments on the im­pend­ing changes.

SAB and its peers had “re­vi­talised” and re­branded the As­so­ci­a­tion for Al­co­hol Re­spon­si­bil­ity and Ed­u­ca­tion to com­bat al­co­hol abuse.

This as­so­ci­a­tion had re­vised its code of com­mer­cial com­mu­ni­ca­tions and the in­dus­try was com­mit­ted to sel­f­reg­u­la­tion through “re­spon­si­ble mes­sag­ing”, for in­stance.

Gail Schim­mel, CEO of the Ad­ver­tis­ing Stan­dards Au­thor­ity of SA (ASA), said the al­co­hol in­dus­try “is a suc­cess­ful study in self-reg­u­la­tion”, given its high de­gree of com­pli­ance.

“We re­ceive very few com­plaints,” Schim­mel said.

ASA fig­ures show that since 2014, only 13 com­plaints against al­co­hol ad­ver­tise­ments have been for­mally in­ves­ti­gated. Nine were lodged by con­sumers — three of those were up­held — and four by com­peti­tors.

Trikam­jee said “SAB ac­knowl­edges the chal­lenges of al­co­hol-re­lated harm and ac­cepts that the in­ci­dence of al­co­hol abuse in our coun­try is too high”. Tack­ling al­co­hol­re­lated harm was “an im­per­a­tive”, as was in­dus­try trans­for­ma­tion and broad­based eco­nomic de­vel­op­ment.


/Rus­sell Roberts

Tip­ple rip­ples: The state is propos­ing a Liquor Amend­ment Bill in an at­tempt to curb al­co­hol abuse. If passed, this would re­sult in the cur­tail­ing of liquor ad­verts.

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