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The liquor business: An industry under siege

Wine Cellars SA chairperson Henk Bruwer speaking at the WCSA annual congress.

Sitting listening to Wine Cellars SA (WCSA) chairperson Henk Bruwer deliver his annual report last Thursday at the WCSA Annual Congress at the Spier Conference Centre, it was easy to conclude that the wine industry is facing desperate times. Deviating from a prepared speech, he chose to speak from the heart, saying that the industry was facing some of its greatest challenges yet. Things are so bad, says Bruwer, that if something dramatic does not change in the next year, the impact on the industry will be catastrophic.  He’s not alone in this view, if the extent of head nodding that accompanied his (at times) emotional delivery is anything to go by.

The current state of the market locally and overseas notwithstanding, there is a growing, government-led assault, on the liquor industry in general, clearly aimed at addressing the enormous alcohol abuse problem that bedevils our society.

The scale of the problem of alcohol abuse in South Africa in general, and in the Western Cape in particular, is frightening, but the question must be asked whether steps taken by government thus far, and planned for the near future, will have the desired effect, or will they fatally damage an already struggling industry.

Way back in 2009, the department of health reacted to a WHO 2008 World Health Assembly resolution calling on member states to address the rising level of premature alcohol related deaths worldwide. The proposal at the time was to drastically limit alcohol advertising, in the belief that it would help to reduce the extent of alcohol abuse, but this was refuted by the likes of the Industry Association for Responsible Alcohol Use (ARA), which contended that there is little if any peer reviewed evidence that it would have the desired effect. Rather said ARA, we need to address the problem through education programmes, particularly for the youth. The greater problem of poverty and joblessness driven depression, acknowledged as significant drivers of alcohol abuse, must also be addressed.

While there is an argument for tighter regulation of alcohol advertising – advertising billboards outside schools and TV ads that blatantly suggest that alcohol consumption is de rigeur if one is to enjoy oneself socially seem to be ubiquitous – will banning alcohol advertising outright (the latest plan revealed by health minister Aaron Motsoaledi in January of this year), really make much of a difference? ARA thinks not, suggesting instead that the current system of self-regulation coupled with health warnings, and industry funded education programmes are far more beneficial.

If anything, an outright ban will simply entrench existing market shares in the alcohol industry, and raise enormous barriers to entry for new entrants, and more importantly foreign investors. And those who abuse alcohol regularly are unlikely to cease doing so if alcohol advertising is banned.

The dismal performance of the anti-tobacco campaign lends credence to this view, with illegal cigarette smuggling an increasing problem, which has significant negative consequences. Illegal cigarettes typically have higher tar and nicotine content, and slip under the excise radar. Sold illegally on the streets, they are freely available to underage smokers and dirt cheap by comparison.

There is every reason to believe that an alcohol advertising ban will have similar consequences, with illegally brewed – and dangerous – alcohol finding its way into the market.

The City of Cape Town has curtailed liquor trading days and hours, despite the results of a public participation process that indicated that the citizenry in general wanted things at least to remain the same, at best to be more liberalised. Clearly, the views of the majority of the population have little credence with the powers that be that must be seen to be doing something. If one cannot buy alcohol on Sundays, one will simply buy sufficient on Saturday.

Drink driving is perpetually in the news, and the permissible level of blood alcohol has declined relentlessly, with little apparent effect. However, the recent naming and shaming campaign, whereby convicted drink drivers’ names are published in the press, seems to be the first initiative to have had a positive effect. Nonetheless, it seems that the legal blood alcohol limit is to be reduced to zero. Quite how the authorities will deal with a driver who tests positive after consuming a dose of perfectly legal, prescribed cough mixture (much of which contains alcohol), is as yet unclear.

It is perceived it seems that the best way to deal with drink driving is to curtail alcohol consumption in general. Talk about killing a mouse with a shotgun.

The latest proposal is to raise the legal alcohol consumption age to 21, in the forlorn hope that this will prevent young people from drinking. It may well curtail legal access to alcohol, but just like the increase in the legal age for buying tobacco products did, it will likely drive the trade underground.

Yes, we do have a significant alcohol abuse problem, but will continually bashing an industry that is a significant employer and contributor to the economy of the Western Cape really address the problem?

It is high time that government dispenses with politically expedient “be seen to be doing something” initiatives and sets about addressing the root causes of the problem: unemployment, lack of education and abject poverty.

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