Tuesday, 4 October 2016

Proposed New National Liquor Policy causes a stir

Liquor Law - The proposed amendments to the National Liquor Act are contained in the draft National Liquor Policy - published for comment on 20 May 2015.  Anyone can comment up to 14 November 2016.  

The main policy considerations listed in the document are :

1. Restructuring the liquor industry,
2. Giving priority to facilitatio of entry and empowerment of new entrants, and
3. To better reflect on all social an economic costs associated with liquor abuse.

We list the most important amendments and comment in brief on the implications thereof.  

 Licence holders may be held liable for damage caused by their customers

The question is how a court will - legally - contribute the behaviour of a person to the supplier of a legal substance?    As one commentator aptly put it – will Pick ‘n Pay be held liable for a murder committed with a steak knife bought at one of its stores?   One can think of many more absurd examples.  It is bound to scare away, rather than attract new entrants to the industry.

Increasing the legal drinking age from 18 yrs to 21 yrs

The question is how someone can be deemed to have the necessary judgement to exercise his/her vote, but not old enough to choose what to drink?    Studies abroad have shown that raising the legal drinking age does not alter the drinking patterns of heavy drinkers.   In another instance, it only lead to a 6% reduction in the number of university students consuming liquor.

No liquor outlets within 500m from churches & schools

It is illogical and impractical to link any fixed distance between liquor outlets and certain institutions to alcohol abuse.  Why would a school boy, on his way to buy liquor, turn around because the liquor store is situated 600m (and not 500m) from his school or residence?   The answer is simple – he will not.   It is even more ridiculous to suggest that outlets within 500m of these institutions should have their licences cancelled after two years – if they haven’t moved by then.   This column regrettably does not allow for full comment on this proposal, save to say that it will not withstand the test of our constitution and established legal principles.   Members of Liquor Boards have the training and experience - they should be trusted to exercise their judgement in each individual application. 

Limiting liquor trading hours

The trading hours of the majority of liquor outlets coincide with times of the day when the citizenry are economically active.   It is naïve to believe that people will adapt their behaviour to when it conflicts directly with their social and economic interaction.  The e-toll saga is a good example, as are the prohibition era in the US and our own restrictive liquor policies during the apartheid era. The public would rather buy from illegally operated outlets or order more liquor before closing time.    

BBBEE – Codes

Much is made of the enforcement if these codes in the proposal.   It is seen as the main mechanism to drive transformation.  The irony is that these codes were withdrawn within a week of being published earlier this month.  The current codes haven't presented an obstacle to new entrants into the market. We trust the new codes won't have a negative effect when implemented.   

Trust fund

A trust fund to be used to combat alcohol abuse is proposed.  The industry will contribute a percentage to the fund, to be determined by the Minister of Trade and Industry (after consultation).   The state will have direct oversight and control over the fund and activities to be implemented.  It is foreseen that a government agency will be established for this purpose.   Governments in general have poor track records in managing these kind of funds.  This looks like a mechanism to fund the additional staff members required to build the staff capacity referred to in the policy document.    It is no less than another form of tax being added to an already overtaxed industry. 

In conclusion

Licensing is set to become even more expensive and onerous as it will become more difficult to comply to legislation.   It will become more difficult for small business to enter the market due to higher cost and risk. 

The emphasis of all role players should be on influencing positive social norms and values.   This will influence drinking patterns to a much larger extent than legislation requiring a host of new administrative infrastructure. If the energy required to implement the above proposals could be spent on promoting positive social behaviour (which is one of the proposals), chances are that we'll be much closer to reaching the goals set in this policy document.

[Article by The Licence Co (LiquorWise Division)]  


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