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The baby out with the bath water

The City of Cape Town's Liqour By-law amounts to little other than throwing the baby out with the bathwater

The City of Cape Town’s restrictive liquor trading by-law is set to come into effect on January 1 next year.  It will, amongst other provisions, reduce the legal trading hours for both on-consumption and off-consumption outlets, in an attempt to curb rising levels of alcohol abuse, and the associated consequences like binge drinking, alcohol-related violence, foetal alcohol syndrome, drunk driving and pedestrian road deaths.

In the course of the mandatory public participation process, which preceded this by-law, the hospitality industry expressed its concern that the proposed restriction in liquor trading hours would have dire consequences. Guest houses and restaurants in residential areas for example, will no longer be able to serve liquor after 9pm.

Wine farms, of which a substantial number are located within the environs of the City – the Helderberg Wine Route and the Constantia Wine Route come to mind – would not be permitted to open their tasting rooms before 11am, nor would they be permitted to sell more than three cases of wine at a time to a single purchaser (the limit is 30 litres per day).

Hospitality industry opposition at the time of the public participation process was stiff, and the City’s task team gave the assurance that all inputs would be considered before the final by-law was written. The by-law was approved by Council on July 28, virtually unchanged.

It is undeniable that the consequences of alcohol abuse are destructive, and the Western Cape in particular has a bleak history of negative alcohol related social consequences. Having said that, will restricting liquor trading hours have the desired effect, or is this simply a case of political expediency?

The hospitality and liquor industries will tell you that there is little solid evidence that restricting trading hours will solve the problem, stating that proper enforcement of existing legislation, particularly in respect of the few rogue outlets who flagrantly flout liquor trading regulations, is preferable. The argument that punishing the many to bring the few into line is tantamount to throwing the baby out with the bath water resonates.

But we are no strangers to this form of legislation, the Tobacco Products Control Act, the National Credit Act (NCA) and the imminent Consumer Protection Act being three very recent examples. While all three undoubtedly address pressing issues in their respective spheres of influence, they have three characteristics in common. They all address soft targets, their efficacy is questionable, and they all constitute what is euphemistically known as “nanny state” legislation.

It’s a lot easier to enforce public smoking bans than it is to address housebreaking, car hijacking, and cash in transit heists. After all, a restaurateur who is fined for allowing smoking in the general dining area is hardly likely to pull out a gun when issued with a fine. A 2008 study by the health economics unit of the University of Cape Town (“The impact of tobacco advertising bans on consumption in developing countries”, Evan Blecher, Policy paper number 13) found that “Past consumption is the most important determinant of consumption and even prices and incomes are not significant determinants even though they are signed correctly. This is consistent when looking only at the sub-sample of developing countries although in such a case comprehensive (advertising) bans are found to have a very small negative impact in determining consumption.” Poor education levels are seen to be one of the principal reasons why people are induced to smoke by advertising, despite the abundance of evidence that smoking is potentially fatal, so the “nanny state” enacts legislation to protect its vulnerable citizens.

The National Credit Act came into being to protect the consumer from rapacious lenders, and while many aspects of the legislation are long overdue, the assumption that people from previously disadvantaged communities are not sophisticated enough to manage their indebtedness carries a distinctly – albeit unintentional I am sure – racial over tone.  How many poor people suffered under the yoke of rapacious furniture retailers who carried their own credit book? Until the NCA came into effect, it was commonplace for a borrower to have a garnishee order slapped on their salary after one missed payment, or to have the furniture item repossessed, touched up and resold to the next person. Interest rates were usurious as well, but the poor who wanted to acquire a household of furniture had little option, and as a result, understand only too well the perils of debt.

While indebtedness levels have come off since the inception of the NCA in 2007, they still remain high. The very people that it was intended to protect are still at a disadvantage according to a study by Nobambo Nlandu (“The effectiveness of the National Credit Act (2005) in curbing consumer indebtedness”, November 2007, Gordon Institute of Business, University of Pretoria).  “The Act has set a clear agenda of its intentions to harmonise the credit market, and has secured a by-in from the credit providers. However, the consumers, especially the low-income-earners, which are meant to benefit from the Act, are left miles behind.”

And while the Consumer Protection Act will do much to curb the excesses of the retail sector in abrogating consumer rights, particularly in matters of warranty and guarantee enforcement, the legislation is seen by many as tilting the playing fields in favour of the consumer, rather than levelling the playing fields.

The Western Cape Liquor Act was designed to address the perceived inadequacies of existing liquor legislation, with a particular view to reducing harmful alcohol consumption. The City of Cape Town’s by-law takes the legislation a number of steps further, but it is questionable whether it will have the desired effect. The two obscure pieces of research cited in support of the City’s view that reduced trading hours will help to curb alcohol abuse, are from “an area in Brazil” and Lithuania, but no further details are given. How convenient.

The solution lies not in treating the symptom, but in addressing the twin problems of poverty and a lack of education, neither of which can be legislated out of existence.

Clearly, the DA has discovered – much as the ANC did shortly after the 1994 election – that governing successfully requires significantly more than simply winning an election. Being seen to be doing something, albeit ineffectually, is evidently better than doing nothing.

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  1. October 25, 2010 at 1:49 pm

    It is rather frustrating to see them bumble about like idiots on this one. I frankly disagree with the whole law as they want it. If they had half a brain they would realize that policing the existing law better would mean a lot more.

    • October 25, 2010 at 3:37 pm

      Indeed, Batonage. But enforcement is one of the areas in which this Government has always had a very poor track record, unless it sees specific political capital in the outcome of such enforcement. Don’t hold your breath.

  2. October 25, 2010 at 3:58 pm

    Some interesting comment on “Baby out with the bathwater” by Cathy can Zyl, on Grape: http://bit.ly/cajjBT

  1. October 25, 2010 at 12:14 pm
  2. October 25, 2010 at 12:41 pm
  3. October 28, 2010 at 4:41 am

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