Licence overhaul fails to address past disparities

The overhaul to existing liquor legislation proposed by the Department of Trade and Industry in the National Liquor Policy has sparked widespread debate, writes Leon Louw.

The radical overhaul to existing liquor legislation proposed by the Department of Trade and Industry in the National Liquor Policy (NLP) published on May 20, 2015, has elicited widespread debate among the legal fraternity in general, and rights activists and practitioners in particular.

The informal liquor market, which is considerably larger than the formal, accounts for approximately 90 percent of beer and 50 percent of standard wine sold annually. The formal liquor market includes all licensed outlets, comprising bars and taverns, retail stores, restaurants and clubs. Historically, it provided liquor to white people and although it now caters to all South Africans, the majority of licensed liquor outlets are located in commercial business sites and middle class residential suburbs.

The informal liquor market that developed in response to the demand among black people to have access to liquor within their site of residence has been shaped by discriminatory laws that have sought to restrict that access in the past.

The liquor industry has to operate within the diverse socio-economic and racial climate borne of the historical legacies of our past. The successful implementation of any proposed legislation or policy, has to centre on the capability of such measures to recognise existing socio-economic and racial disparities and work for the betterment of the sector.

Challenges

Some of the challenges the NLP identifies are the socio-economic impact of liquor; the slow pace of transformation; the standardisation of key aspects of regulation and improved regulatory collaboration; eradicating the manufacturing and trading in illegal or illicit alcohol; and the challenges with regards to capacity and enforcement constraints within the National Liquor Authority.

Among its proposals are: Trade and Industry Minister Rob Davies is empowered to determine restrictions for the advertising and marketing of liquor products, in addition to prohibitions of sponsorship and promotion; and the introduction of liability of manufacturers and suppliers.

In addition, retailers shall be prohibited from serving “already intoxicated persons” the days and hours when sales of liquor are permitted, and sales of liquor in “zoned areas” be regulated; the national minimum age at which alcohol can be purchased is raised from 18 to 21 years of age; liquor premises be located at least 500 metres away from schools, places of worship, recreational facilities, rehabilitation or treatment centres, residential areas and public institutions; the issue of transformation is addressed, and that the National Liquor Authority must be empowered to ensure that licensing conditions as articulated in the Broad-Based Black Economic Empowerment (BBBEE) Codes of Good Practice are imposed and strictly monitored, failure of which shall result in the suspension or revocation of the licence; national, provincial and local departments responsible for liquor registration must work together as seamlessly as possible; and provisions relating to the illegal manufacture and trading in liquor should be strengthened.

Conferring discretionary power to determine restrictions for advertising and the marketing of liquor products to the minister who fulfils a legislative function, is a breach of the doctrine of the separation of powers as contained in the South African constitution.

New policies

Zoning laws do not apply in most townships as, in the past, they were not subject to town planning schemes. Little commercial development took place in townships. Township residents were forced to shop in faraway white-owned centres, or in licensed white-owned or Indian-owned shops dispersed around the townships.

To regulate the days and hours when sales of liquor are permitted, and to limit sales of liquor to “zoned areas”, will substantially reduce the sale and accessibility of liquor in townships. Such a measure surely discriminates against black consumers and entrepreneurs and will impede transformation.

The provision that liquor premises must be located at least 500m away from schools, places of worship, recreational facilities, rehabilitation or treatment centres, residential areas and public institutions, is geographically impossible to apply in informal settlements.

After the implementation of previous legislation, only a few informal traders migrated to the formal system. The vast majority continued to operate as informal enterprises, rather improving and developing new and better coping strategies to evade law enforcement. Yet the NLP is silent on key aspects of informal trade practice, particularly the collective response to greater law enforcement.

New policies have to be checked and enforced. It is doubtful whether the SAPS could effectively carry out the task as they are already burdened by our crime-ridden society. It is also arguable that, in the application of the law incidences of police corruption, bribery and favouritism, which is a commonality faced by informal traders, will continue or escalate.

The NLP labels the large illegal sector that does not contribute to the mainstream economy as a “concern for regulators and a threat to the licensed players within the industry”. Unfortunately, the NLP categorically fails to address the difficulties faced by illegal traders to migrate into the mainstream economy. To introduce regressive policies that blatantly ignore socio-economic disparities and paint liquor traders with the same socio-economic brush will not bring about transformation.

* Leon Louw is the Free Market Foundation executive director.

* The views expressed here do not necessarily reflect those of Independent Media.

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