Liquor Amendment Bill Workshop - Report

IT’S TIME TO RESUSCITATE THE LIQUOR AMENDMENT BILL IN PARLIAMENT

JANUARY 2023

DG Murray Trust (DGMT) Alcohol Harms Reduction

Amendment Bill Workshop Report

Restrictions on Marketing and Advertising

Legislative Holes in the 2017 Version of the Draft Bill

Restrictions on Distribution and Supply to Unlicensed Premises

How to Identify the Source of Illegal Liquor?

Several gaps have been identified in the 2017 version. The question is who fixes these holes and when?

Key proposals evaluated in Genesis Analytics’ study of the Draft Liquor Amendment Bill (2017 Version)

on Consumption of Advertising Restrictions Impact on Consumption of a Higher Legal Drinking Age

EXECUTIVE SUMMARY

DGMT’s Alcohol Harms Reduction (AHR) Strategy aims to reduce heavy and binge drinking and its associated harms in society. Our fight is not against all alcohol consumption; it is against industry and societal practices that promote excessive drinking.

DGMT is advocating for a strong regulatory environment that manages access to alcohol and is calling for the Draft Liquor Amendment Bill (DLAB) of 2016 to be brought back to South Africa’s national legislature in order to tighten certain clauses that will reduce the high cost of heavy and binge drinking, and alcohol-related harms on society.

The bill seeks to amend the national liquor act of 2003, by modifying legal restrictions governing alcohol advertising and sales. It has been on hold since 2018 after its initial approval by cabinet for public comment in 2016. The Department of Trade and Industry is predicted to re-introduce the bill in parliament this year.

Some of the bills proposals in the legislation’s current form include:

* Restricting advertising of alcohol on print media, television, radio, billboards and all other public areas except at site of sale;

* Liquor outlets may not be located within 500m of schools, residential areas, and places of worship and recreation;

* Increasing the legal drinking age from 18 to 21 years;

* Regulating specific trading days and hours for alcohol to be distributed and manufactured; and

* Placing liability on alcohol retailers and manufacturers for harm related to the contravention of regulations.

There has been no visible movement by the government on the DLAB since 2016, although there is evidence that the liquor industry is renewing its efforts to challenge the need for amendments to the current Liquor Act.

In August 2022, DGMT held a workshop to create momentum around the Bill and study its potential impact. The workshop aimed to build collective knowledge and deepen the understanding of the regulatory changes proposed by the Bill.

The workshop focused on the key objectives of the 2016 Draft Bill:

* imposing stringent restrictions on advertising;

* placing of outlets at least 500m away from schools, places of worship and residential areas;

* placing liability on retailers and manufacturers for harms related to the contravention of regulations; and

* increasing the legal drinking age from 18 to 21.

DGMT invited a legal consultant to provide legal analysis of the Bill. They highlighted that the implementation of the Bill would require extensive national and provincial coordination and cooperation. Some areas of regulation such as retail sales and liquor licences lie with provinces, liability issues related to manufacturer’s trade practices, and the drinking age would be regulated by national government. This highlights the need for a whole-of-government approach to reducing alcohol-related harm. A whole-of-government approach refers to a coordinated legislation and policy implementation process to tackle an issue that cuts across social and economic mandates that different government departments hold. Since alcohol abuse affects multiple government departments, it should not be the responsibility of a single department.

In 2017, a report on the impact of the Bill was prepared for the National Economic Development and Labour Council (NEDLAC). The report, which was prepared by Genesis Analytics, offered useful projections of economy-wide, advertising and media sector impact using industry research and economic modelling. This report is an important piece of research because it provides evidence of the potential effectiveness of the Bill, and therefore featured heavily throughout the workshop. Participants attending the workshop reflected on a comprehensive socioeconomic impact assessment of the DLAB, conducted by Genesis Analytics in 2017. The assessment provides clear evidence that the Bill will reduce harmful consumption patterns with very minimal impact on the economy.

The 2017 report produced by Genesis Analytics illustrates the implementation of the Liquor Amendment Bill in its current form would reduce alcohol consumption by up to 7% and save the South African fiscus almost R2bn in health-related costs.

Beyond saving a projected R1,9bn annually in alcohol related public healthcare expenses nationally it is further estimated the bill will reduce road accidents by 3% annually.

Morevoer, Genesis Analytics research conducted in 2022 into the bill’s introduction further emphasises the benefits of its implementation. Specifically, a 4% drop in the total alcohol consumption by South Africans as almost 700,000 adults are projected to change the consumption patterns.

KEY TAKEAWAYS FROM THE WORKSHOP

* The Bill could reduce alcohol consumption by 3% to 7%, which would in turn reduce public health costs by R1.9 billion per year.1

* The Bill is further estimated to reduce road accidents by 3% per year and it is predicted that welfare, violence and crime costs will likely follow the trend of public health and road accident costs.2

* The ban on tobacco advertising led to a reduction in smoking, in part, because the ban was accompanied by other measures to control tobacco use. This confirms the view that applying only one remedy will be less effective than a combination of measures, such as the “best buys” 3 advocated by the World Health Organisation (WHO).

* Despite the alcohol industry’s claims that this Bill will destroy the sector, the impact assessment only cites an impact on GDP reduction of between 0.006% and 0.008% (related to the positive contribution to the industry; this will be offset by reduced societal costs).

* The study estimates the impact on employment across multiple sectors at a reduction of between 0% and 0.016% (fewer than 1 500 jobs, which the industry can easily restructure across the value chain).

* The estimated impact on tax revenue across the economy is a reduction of between 0.026% and 0.033%, which is far less than the 5% cost savings that the government will make in public health spending.

* It will further have a very minimal impact on industry growth, with an estimated reduction of between 0.9% and 2%. These would be very minimal reductions in profit margins.

* The alcohol industry only accounts for 4% to 6% of the advertising market, which will likely be taken up by large industries such as the fast-moving consumer goods (FMCG) and insurance industries.

* The legislative provisions in the draft Bill, particularly with regard to advertising, are not watertight. Legislative gaps need to be filled if we are to effectively reduce alcohol harms.4

* No single method can effectively reduce alcohol-related harm in South Africa. Methods promoted by the WHO and recommended in the National Liquor Policy of 2016, but not included in the Bill must be included in a revised version of the draft legislation.

These include:

› Tougher action against advertising, including a complete ban;

› Increasing tax on alcohol and increasing price of alcohol through minimum unit pricing and excise taxes;

› Reducing the availability of alcohol by restricting operating hours, limiting outlet density, and outlawing the sale of alcohol to already drunk customers; and

› Reduce blood alcohol concentration (BAC) levels for drivers.

1 Genesis Analytics. 2017. Socioeconomic impact assessment of the Draft Liquor Amendment Bill. https://genesis.imgix.net/uploads/downloads/Genesis-Analytics-NEDLAC-Impactof-amendments-to-Liquor-Act-Final-Report-31-October-2017.pdf

2 Genesis Analytics. 2017. Socioeconomic impact assessment of the Draft Liquor Amendment Bill. https://genesis.imgix.net/uploads/downloads/Genesis-Analytics-NEDLAC-Impactof-amendments-to-Liquor-Act-Final-Report-31-October-2017.pdf

3 The “best buys are the recommended policy options for reducing binge and heavy drinking. World Health Organization. 2018. Global Status Report on alcohol and health.

4 Alcohol harms can be defined as the change in behaviour when one has consumed alcohol that causes them to make decisions that are harmful to themselves and others. These are seen in trauma injuries, road accidents, interpersonal violence and gender-based violence.

INTRODUCTION:

WHY WE NEED A STRONG REGULATORY ENVIRONMENT

THE HISTORICAL ROOTS OF SOUTH AFRICA’S ALCOHOL PROBLEM

South Africa has a painful history of alcohol abuse. The origins of our drinking problem go back to 1833, when the Slavery Abolition Act took effect in most British colonies. Wine farmers in the Cape Colony then created a new form of slavery the “dop” (tot) system, retaining cheap, pliant labour by supplementing meagre wages with tots of wine, administered up to five times a day.5 Using alcohol to oppress the majority was further entrenched by the migrant labour system and the pre-democratic government’s use of revenue from sales in townships to build the apartheid infrastructure.6

5 London, L. 1999. The `dop’ system, alcohol abuse and social control amongst farm workers in South Africa: a public health challenge. Social Science & Medicine, Vol. 48(10), p1407-1414.

6 The apartheid government and the liquor industry colluded in building the bantustans (areas of separate development for black people). It started with the state’s co-option of beer production and distribution as instruments of control and compliance, through the Liquor Act of 1928.

KEY DATES IN SOUTH AFRICA’S ALCOHOL ABUSE JOURNEY

1652. Dutch settle in South Africa, bringing spirits to trade for cattle, slaves and other items and establishing the first wine farms in sub-Saharan Africa

1833. British Slavery Abolition Act leads to the entrenchment of the “dop” system.

1928. South African Liquor Act allows state to co-opt beer production and distribution.

2003. Adoption of the Liquor Act of 2003, SA’s first post-apartheid liquor legislation, which does not adequately regulate alcohol consumption.

2013. Draft Control of Marketing of Alcoholic Beverages Bill approved for publication for public comments, but not subsequently gazetted. It did not progress further. This is a missed opportunity to change the social culture related to binge and heavy drinking.

2015. New draft Liquor Policy published after a review of the 2003 Act. A new National Liquor Policy was approved by Parliament in 2016, leading to the drafting of a new Liquor Amendment Bill.

2016. Draft Liquor Amendment Bill (DLAB) gazetted for public comments. It seeks to amend the Liquor Act of 2003 to restrict advertising, raise the legal drinking age from 18 to 21 and impose potential liability on manufacturers and distributors for harm arising from supply of liquor to unlicensed retailers. The Bill has not progressed through the legislative process.

2017. An altered version of the DLAB is circulated, but not made publicly available.

2020. A complete ban on alcohol during the COVID-19 pandemic sees a significant reduction in trauma cases in hospitals. The evidence is highlighted by civil society and public health institutions, but there is no action on improving regulations.

2022. Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour, tabled in the National Council of Provinces on 18 May 2022, says the legislation relating to the DLAB is “under review”. There has been no further indication of progress since.

THE IMPACT OF ALCOHOL ABUSE IN SA

According to WHO data, relatively few South Africans (31%) drink alcohol compared to people in other countries (43%). However South Africans who do drink alcohol tend to drink more than their counterparts. Over half of South African alcohol consumers are binge drinkers, which is defined as drinking more than five standard drinks in one sitting7. The global average of binge drinkers is 50% of those who drink alcohol; in South Africa, the average is 59%, with 38% of female drinkers engaging in heavy and binge drinking and, alarmingly, 70% of male drinkers. These statistics from the WHO also reveal that 80% of male drinkers aged 18-35 engage in heavy and binge drinking.8

Alcohol, the most widespread drug of abuse in South Africa, is the most harmful drug at a population level.9 It is the third largest contributor to death and disability after unsafe sex/sexually transmitted infections and interpersonal violence, both of which are themselves influenced by alcohol consumption.10 About 40 000 deaths per year are caused by people under the influence of alcohol11; South Africa has the highest femicide rate in the world at 8.8 per 100 00012; 54% of homicides and violence cases are associated with alcohol and 56% of road deaths.13

A further consequence of alcohol misuse in South Africa is the extremely high prevalence of Foetal Alcohol Spectrum Disorder (FASD). In the Western Cape, the rate among Grade 1 learners in high-risk, rural communities is as high as between 18% and 26%.14 Even when it does not lead to FASD, alcohol abuse often contributes to situations where parents are not present, physically or emotionally, for their children and, in extreme cases, it is linked to child abuse and neglect. Children whose parents abuse alcohol (or other substances) are significantly more likely to have medical and behavioural problems, and are likely to also abuse drugs and alcohol.15

7 World Health Organization. 2018. Global Status Report on alcohol and health.

8 World Health Organization. 2018. Global Status Report on alcohol and health.

9 World Health Organization. 2018. Global Status Report on alcohol and health.

10 Matzopoulos, R G; Truen, S; Bowman, B and  Corrigall, J. The cost of harmful alcohol use in South Africa. SAMJ, S. Afr. med. j. [online]. 2014, vol.104, n.2 [cited 2022-09-16], pp.127132. Available from: http://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S0256-95742014000200023&lng=en&nrm=iso

11 Global Burden of Disease Collaborative Network. Global Burden of Disease Study 2016 (GBD 2016) Incidence, Prevalence, and Years Lived with Disability 1990-2016. Seattle, United States: Institute for Health Metrics and Evaluation (IHME), 2017.

12 World development report 1993: Investing in Health. New York: World Bank, Oxford University Press; 1993

13 SAMRC-UNISA. 2009. A Profile of Fatal Injuries in South Africa.

14 May, P., de Vries, P., Marais, M. et al. 2016. The continuum of foetal alcohol spectrum disorders in four rural communities in South Africa: Prevalence and Characteristics. Drug & Alcohol Dependence, Vol. 159: 207-218.

15 Morojele N, Lombard C, et al (2018). Alcohol marketing and adolescent alcohol consumption: Results from the International Alcohol Control Study (South Africa). South African Medical Journal 108 (9): 782-788

THE TRUE COST OF HARMFUL DRINKING

Although the liquor industry contributes to the GDP of South Africa (around 3% of the total GDP16), the negative effects of alcohol abuse cost the nation more than the industry contributes. For example, if we look at the cost to economic productivity due to absenteeism, welfare costs, public health costs and direct costs to the fiscus, alcohol abuse is costing South Africa approximately R227 billion.17 The industry contributes 3% to GDP, yet the loss to GDP is between 10% and 12%.

A binge drinking culture is sustained through ineffective regulatory measures that allow alcohol to be easily available and cheaply sold with minimal consequences for behaviour related to risky drinking. Poverty, depression and hopelessness, coupled with a lack of social and recreational opportunities in many communities, drive heavy and binge drinking among many South Africans, particularly the vulnerable communities that DGMT’s strategies are aimed at.

16 National Treasury 2014. A review of the taxation of alcoholic beverages in South Africa: A Discussion Document.

17 Matzopoulos, R G; Truen, S; Bowman, B  and  Corrigall, J. The cost of harmful alcohol use in South Africa. SAMJ, S. Afr. med. j. [online]. 2014, vol.104, n.2 [cited  2022-09-16], pp.127-132. Available from: http://www.scielo.org.za/scielo.

php?script=sci_arttext&pid=S0256-95742014000200023&lng =en&nrm=iso

The COVID-19 pandemic illustrated that the limited availability of liquor can reduce alcohol-related harms on society. When alcohol was not available at all, or less available, there was a reduction in trauma incidents in hospitals across the country.

Source: {designer placed this here as per comment, please ensure this is correct:} From a test case in Worcester hospital, in a recently published study by Chu, Kathryn M., et al, titled “Trauma trends during COVID-19 alcohol prohibition at a South African regional hospital”.

Figure 1 below illustrates the impact of bans on alcohol.

Fortunately, the most immediate and effective measures that we can implement do not need to be drastic. We know that extreme legal actions such as a permanent prohibition of alcohol would just result in the growth of illegal brewing and smuggling although it certainly made sense to curb the sale of alcohol until the peak of the pandemic passed. But there are a number of measures that the WHO has identified that are highly cost-effective, feasible and implementable at low cost. These are not drastic measures. On the contrary, these are targeted interventions that make both economic and social sense, will have few unintended consequences and need to be implemented as a matter of urgency.

WORLD HEALTH ORGANISATION “BEST BUYS” TO REDUCE ALCOHOL ABUSE

Place a comprehensive ban on the advertising of alcohol (except at the site of sale, where it should not be visible to those under 18 years).*

Increase the price of alcohol, both through excise taxes and by introducing a minimum price per unit of pure alcohol in liquor products.*

Reduce the legal limit for drinking and driving to a blood alcohol content of 0.02% or below.

Reduce the availability of alcohol, especially in residential areas (by limiting the density of liquor outlets, shorter trading hours, and ending the sale of alcohol in larger containers like 1 litre bottles of beer).*

Intensify the availability of counselling and medically assisted treatment for persons struggling with dependence.

Although only points 1, 2 and 4 were discussed at the workshop and detailed in this report, point 3 and 5 are equaly important to combat alcohol abuse.

Source: World Health Organization. Global Status Report on Alcohol and Health 2018.

1

LEGAL ANALYSIS OF THE DRAFT

In the DGMT workshop, Stephen Harrison, an attorney specialising in public law and policy scrutinised the Bill from a legal perspective.

This portion of the workshop focused on the following key objectives of the 2016 Draft Liquor Amendment Bill, which was to amend the Liquor Act 59 of 2003 to:

* restrict liquor advertising;

* impose potential liability on manufacturers and distributors for harm arising from supply of liquor to unlicensed retailers; and

* place outlets at least 500m away from schools, places of worship and residential areas.

The draft Bill was gazetted for 30 days of public comment on 30 September 2016, six years ago. In 2017 an amended version of the draft Bill was circulated, but not released publicly. Legislatively, the draft Liquor Amendment Bill of 2016 has not progressed, nor has it been submitted to Parliament for consideration and further public comment.

“It is important to note that the 2016 Draft Bill is the officially published Bill that was open for public comment, so that is the Bill DGMT is assuming the state is planning to take forward. However, we also have to consider the 2017 Bill because government might resume the Bill process and that version might surface.”

Onesisa Mtwa, DGMT Innovation Manager

CONSTITUTIONAL PARAMETERS OF NATIONAL LEGISLATION

It is important for those working in advocacy around policy and legislative initiatives in public health and AHR to understand the constitutional parameters of national legislation that seeks to regulate the liquor trade. The principles in the Constitutional Court 1999 Liquor Bill Case are that:

* National legislation regulates the manufacture and wholesale distribution of liquor (because those activities generally occur across provincial boundaries).

* Provincial legislation regulates retail trade in liquor, as well as micro-manufacturers.

However, since the judgment of 1999, the retail trade in liquor has altered. For example, liquor is now extensively sold online (across provincial boundaries). This raises grey areas in relation to the clearcut lines set by the Constitutional Court.

There are also exceptions: Applying Section 44(2) of the Constitution, national legislation can only regulate retail trade in liquor, when necessary:

a) To maintain national security

b) To maintain economic unity

c) To maintain essential national standards

d) To establish minimum standards required for the rendering of services

e) To prevent unreasonable action taken by a province that is prejudicial to the interests of another province or to the country as a whole

Constitutional issues such as those outlined above are likely to explain some key omissions in the 2017 version of the draft Bill.

Applications for registration as manufacturers and distributors can’t be registered for premises:

* in areas not classified for liquor trading;

* attached to petrol stations; and

* near public transport facilities.

The manufacture, distribution or the retail sale of liquor is prohibited in any location that is less than five hundred (500) metres away from:

* schools;

* places of worship;

* recreational facilities;

* rehabilitation or treatment centres;

* residential areas; and

2016 Version 2017 Version

* public institutions and other similar amenities.

Proximity restrictions for retail sale of liquor are removed. Proximity restrictions remain only for manufacturers and distributors in relation to premises:

* in areas not zoned for liquor trading;

* attached to petrol stations; and

* 500m away from public transport facilities, places of worship and educational institutions.

The only consistent alcohol-harm reduction provisions in both the 2016 and 2017 version are:

* restrictions on marketing and advertising;

* raising the legal “drinking age”; and

* restrictions on distribution and supply to unlicensed premises.

RESTRICTIONS ON MARKETING AND ADVERTISING

At the moment, we do not have any substantive legislative regulation of alcohol advertising and marketing. The industry is self-regulated via the Advertising Review Board and its code of conduct, which sets out what may or may not take place in terms of advertising. The public can make complaints to this industry voluntary body, which can make rulings binding on its members. But these rulings are not binding on advertisers or industry players that choose not to be members.

The exception is section 9 of the Liquor Act, 2003 which states:

Advertising restrictions

(1)  A person must not advertise:

(a) any liquor or methylated spirits

i. in a false or misleading manner;

ii. in a manner intended to target or attract minors; or

(b) any substance that is prohibited in terms of this Act.

(2) A person must not advertise any substance as liquor or methylated spirits if that substance is not liquor or methylated spirits, respectively, as defined in this Act.

Section 9 of the Liquor Act as amended by 2017 Draft Bill states:

Advertising restrictions

(1)  A person must not advertise:

(a) any liquor or methylated spirits

iii. in a false or misleading manner;

iv. in a manner intended to target or attract a person under the age of twenty-one (21);

v. which depicts a person under the age of twenty-one (21) in an act of consuming liquor;

vi. in a manner that is directed at a person under the age of twenty-one (21); or

vii. with content that has images or icons that have unique appeals to persons under the age of twenty-one (21).

(b) any substance that is prohibited in terms of this Act.

(2) A person must not advertise any substance as liquor or methylated spirits if that substance is not liquor or methylated spirits, respectively, as defined in this Act.

(3) The advertisement of liquor is prohibited in the following:

(a) billboards placed less than a hundred (100) metres away from educational institutions, junctions, street corners or traffic circles;

(b) social media, movies, cinemas, theatres and the internet;

(c) print media and the distribution of pamphlets containing liquor advertisements;

(d) company and delivery vehicles of registrants; or

(e) radio and television airing beyond the time slots, as prescribed by the Minister.

(4) The liquor advertisement and marketing material shall reflect the harmful effects of liquor abuse, as prescribed by the Minister.

(5) The Minister may, after consultation with the Council, relevant government departments and municipalities as the case may be, prescribe more restrictions on the provisions of section 9.

(6) Any person who contravenes the provisions of section 9, commits an offence.

The 2017 version of the Bill seeks to considerably expand restrictions on advertising beyond current legislation. It seeks to criminalise advertising that is not consistent with the expanded restrictions.

This is a significant development on the existing legislation provisions in section 9 of the Act.

However, if one is going to be looking at an effective legislative regime around liquor advertising and marketing, those provisions can be compared to Swiss cheese full of holes.

These provisions are not responsive to the current creative approach to marketing and advertising that characterises not only the liquor advertising industry, but others as well.

LEGISLATIVE HOLES IN THE 2017 VERSION OF THE DRAFT BILL

* This piece of legislation seeks to only regulate billboards less than 100m away from designated areas. Thus, a billboard, placed 101m from a school would not be affected.

* This legislation does not regulate sponsorships, including sports, events, hosting games, geofencing18 at events, product placements etc.

* This legislation does not regulate promotions, including free or reduced-price alcohol, gifts, cash rebates etc.

* There is an absence of key definitions, e.g. “advertise” or “advertisement”.

In 2013 the Department of Health developed the Draft Control of Marketing of Alcoholic Beverage Bill, intended to prohibit all alcohol advertising and marketing, including sponsorships and promotions. It never saw the light of day. Research evidence suggested this was because of strong lobbying against it. The absence of key definitions in the 2017 version means there are inevitably opportunities for legal loopholes to be exploited to argue why certain activities do not constitute advertising.

ONLINE SALES

Another glaring omission in the legislation is the regulation of online sales with regard to minors. Since the COVID-19 pandemic, online sales have skyrocketed.

This hole could be plugged with on-delivery age verification checks. Age verification checks are technically possible and used in the UK to prevent underage people from engaging in online gambling.19

“The watered-down advertising provisions in the 2017 draft Liquor Amendment Bill compared to the 2013 Draft Control of Marketing of Alcoholic Beverages Bill, suggests it is not that government is unaware of these areas, or the potential to effectively regulate them. But the omissions suggest a lack of political will to do so, for whatever reason.”

Stephen Harrison, public law attorney

RESTRICTIONS ON DISTRIBUTION AND SUPPLY TO UNLICENSED PREMISES

Liability Provisions (section 34A of the 2017 version)

The above legislation says alcohol manufacturers and distributors can be held jointly and severally liable for alcohol harms if they distribute liquor to an unlicensed person. The unlicensed person can also be held jointly and severally liable. The terms “jointly and severally liable” are significant amendments. It means that all parties are equally responsible. For example: Let’s imagine that a manufacturer or distributor sold liquor to an unlicensed tavern. A patron drank that liquor in the unlicensed tavern and got drunk. She/he/they then left the tavern, got into her/his/their car and ran over a pedestrian. Obviously, the patron is going to be liable for harm caused to that pedestrian. The tavern will be liable. Most effectively, because that is where the money lies, the distributor or the manufacturer also become liable. As liable as the person who knocked the pedestrian over.

Usually, to hold someone liable for harm caused to another person, you need to prove harm was caused, and that it was caused intentionally or negligently. In this case, strict liability is being applied. The person being harmed does not now bear the onus of having to prove that manufacturer/distributor did so negligently. All she/he/they have to prove is that the manufacturer/distributor distributed liquor to an unlicensed person and as a consequence, harm resulted.

This provision is not only applicable to unlicensed providers, if manufacturers or distributors are providing liquor to outlets that are selling liquor to people under the age of 21, or already intoxicated people, and those people cause harm, in this situation the manufacturer/distributor becomes liable. This shifts the legal landscape because if the manufacturer/ distributor does not ensure that the outlet to which they are selling/supplying liquor, follows the law and responsible business practices, then the manufacturer/distributor will be liable.

HOW TO IDENTIFY THE SOURCE OF ILLEGAL LIQUOR?

The hole in this provision is how to establish where the liquor that caused harm came from. There is a need for implementation of a track-and-trace system, whereby one can trace the manufacturer and distributor of the bottle of alcohol. This system should be implemented at the point of retail. This sounds complex, but it has been done effectively in Russia.20 That would be the added piece of the puzzle that would be necessary to make this an effective piece of legislation.

20 Alcohol policy impact case study. The effects of alcohol control measures on mortality and life expectancy in the Russian Federation; Copenhagen: WHO Regional Office for Europe; 2019. Licence: CC BY-NC-SA 3.0 IGO.

SEVERAL GAPS HAVE BEEN IDENTIFIED IN THE 2017 VERSION. THE QUESTION IS WHO FIXES THESE HOLES AND WHEN?

The Department of Trade, Industry and Competition (DTIC) goes back to the drawing board; fixes the legislative holes and improves the legislation in many other respects. It appears that this may be the intention of the DTIC because the latest publicly available information on the DTIC strategic plan and budget, in a report from the Select Committee on Trade, Industry, Economic Development tabled in the National Council of provinces on 18 May 2022 says:

“In respect of the Liquor Amendment Bill, the Department [of Trade, Industry and Competition] submitted that the pandemic highlighted serious challenges in respect of liquor within the country. The legislation is therefore under review taking into consideration lessons learnt and a coordinated approach across government. The Department is considering putting measures in place in a more comprehensive and sustainable manner and has begun engagements with other departments in this regard with a view to strengthening measures in a holistic manner.”21

The question is: If we follow this approach, we are looking at a fairly long-term process. Big holes have already been identified in the 2017 version, but haven’t been tackled for years. Although this option holds the promise of maybe a better product that goes to Parliament in the end, when will that take place?

OPTION 1 OPTION 2

Introduce the draft Bill to Parliament22 with all its imperfections, understanding that Parliament ultimately has the responsibility of passing legislation and determining what is in legislation. This means trusting our elected public representatives guided by public consultation (including submissions and public hearings)— to make the necessary amendments. Perhaps it is better to pass things more quickly, rather than take decades to get there, and adjust as the industry changes. The benefit is that we might end up with a piece of legislation passed in the foreseeable future.

21 Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour, tabled in the National Council of Provinces, 18 May 2022.

22 This option would involve actually shifting responsibility for further development of the Bill from the executive arm of government, which is department, to the legislative arm of government, which is Parliament.

ANALYSIS OF SOCIOECONOMIC ASSESSMENT BY GENESIS ANALYTICS

HOW TO IDENTIFY THE SOURCE OF ILLEGAL LIQUOR?

In the DGMT workshop, Maurice Smithers, executive director of the South African Alcohol Policy Alliance in SA (SAAPA SA), analysed the socioeconomic impact assessment of the Bill that was conducted by Genesis Analytics.

From 2010 onwards, up until 2017, the government actually supported the WHO global strategy to reduce the harmful use of alcohol. This is evidenced by Cabinet’s approval of the National Liquor Policy of 2016, which promotes the adoption of “best buy” strategies, and Cabinet’s approval of the Draft Liquor Amendment Bill of 2016 for public comment. In 2016, business and labour partners in the National Economic Development and Labour Council (NEDLAC) demanded a socioeconomic impact assessment (SEIA) before they could decide on the merits of the Bill. Genesis Analytics produced an SEIA (funded by the SA Liquor Brand Owners Association – SALBA) in October 2017. The Bill appeared to be put on hold around the time the SEIA was published.

Key proposals evaluated in Genesis Analytics’ study of the Draft Liquor Amendment Bill (2017 Version):

* Restrictions on the advertising of alcohol

* A change in the legal drinking age (LDA) from 18 to 21

* Liability for manufacturers, distributors and retailers of alcohol

* Changes to the licensing requirements in respect of B-BBEE

Vicarious liability and changes to the licensing requirements with respect of B-BBEE were given limited attention. The study questions the focus on manufacturers and distributors, suggesting it would be more effective to hold the retailer at the point of consumption liable.

At the time of the study (2017) Genesis maintained manufacturers and distributors had not been held liable anywhere in the world. The Russian system for tracking and tracing became available in 2018.23

There is no indication in the study that the B-BBEE clause will contribute to alcohol-harm reduction. The study said the aim of B-BBEE is to address economic injustices of the past, not to deal with alcohol-related harm.

23 Alcohol policy impact case study. The effects of alcohol control measures on mortality and life expectancy in the Russian Federation; Copenhagen: WHO Regional Office for Europe; 2019. Licence: CC BY-NC-SA 3.0 IGO.

IMPACT ON CONSUMPTION OF ADVERTISING RESTRICTIONS

Research by Genesis Analytics indicates that young people exposed to alcohol advertisements are more likely to start drinking earlier, to consume more and to binge drink. Advertising also encourages heavy drinkers to drink even more.

The impact assessment estimates that restricting advertising would lead to a 7% to 10% reduction in consumption, despite the Industry’s usual argument that they advertise to promote different brands, not to encourage people to drink.

IMPACT ON CONSUMPTION OF A HIGHER LEGAL DRINKING AGE

Increasing the legal drinking age to 21 goes against global trends most countries have an 18-year age limit. Nevertheless, the study concludes that increasing the age to 21 will lead to a reduction in alcohol consumption, in binge drinking, in alcohol-related traffic injuries and in alcoholrelated traffic fatalities. The assessment states that it would lead to a reduction in consumption of 5% - 12%.

After the Enyobeni tavern tragedy, in which children as young as 13 were served alcohol, the president was quoted as saying he had received calls saying we should increase the age of drinking to 21 and that perhaps this needed a national debate.24 The Genesis Analytics study states that changing the age must be accompanied by other measures, including effective enforcement otherwise many young people will migrate to unlicensed outlets to continue getting access to alcohol. The study found that in 2017, the average ratio of licensed to unlicensed outlets was 1:2.3. In other words, for every one licensed outlet, right across the country there were 2.3 unlicensed outlets. In some areas it is as high as 5.

“If young kids of 13 are drinking, when the age of drinking is 18, what would persuade them to stop if the age went up to 21? Well, nothing. Unless many other measures are put into place, including: more effective enforcement, more effective control by authorities and communities over unlicensed outlets as well as non-compliant licensed outlets and measures which encourage young people to engage in other more beneficial social activities than drinking.”

Maurice Smithers, SAAPA executive director

The study also suggests that there may be constitutional obstacles to changing the age, as the Constitution has declared 18 as the age of majority. The DTIC has raised this issue as well.

Summary of Impact of Advertising Restrictions and Higher LDA

* The study concludes that increasing the drinking age to 21 and restricting advertising will result in a 3.2% to 7.45% reduction in alcohol consumption among drinkers aged 15+.

* Implementing these measures will also lead to 185 fewer alcohol-related traffic fatalities annually.

* Although the study couldn’t quantify the impact on other health and social outcomes, these measures are likely to see a reduction in incidences of HIV contraction and interpersonal violence.

IMPACT ON EMPLOYMENT AND GDP

A common argument made by the alcohol industry is that it should not be restricted as it contributes significantly to economic productivity and growth. If restrictions on advertising and raising the LDA to 21 were applied, the study predicts the following outcomes:

* Impact on GDP — reduction of between 0.006% and 0.008%.

* Impact on employment across multiple sectors — reduction of between 0% and 0.016%.

* Impact on employment in the alcohol sector — reduction of between 0.62% and 1.48%.

* Impact on tax revenue across the economy — reduction of 0.026% - 0.033%.

* Impact on tax revenue in the alcohol sector — reduction of 0.15% - 0.59%.

* Minimal impact on the alcohol industry’s growth — reduction of 0.9% - 2%.

* Loss of R800 million for the media industry with a shift from ‘Above The Line’ to ‘Below The Line’ and digital, though the losses might be compensated for by increased advertising for other products, similar to what happened when tobacco advertising was banned.

* Annual savings for the public sector of between R700 million and R1.9 billion in tangible costs, with intangible costs taking the amount of savings much higher.

* Reduction in current alcohol-related health costs which are 5% of total public health spending.

HOLISTIC POLICY APPROACHES 3

The study stresses the fact that no one method can effectively reduce alcohol-related harm in South Africa. It suggests consideration of other methods promoted by the WHO and recommended in the National Liquor Policy of 2016, but not included in the Bill:

* Tougher action against advertising, including a complete ban;

* Increasing tax on alcohol and increasing the price of alcohol through minimum unit pricing and excise taxes;

* Reducing the availability of alcohol by restricting operating hours, limiting outlet density, outlawing the sale of alcohol to already drunk customers; and

* Lowering the minimum blood alcohol concentration (BAC) levels for drivers.

Overall conclusion of the Genesis Analytics SEIA

* The measures currently in the Liquor Amendment Bill will reduce consumption, and save lives and money.

* Implementation of additional measures the full raft of the “best buy” measures proposed by the WHO will have an even greater impact.

* “The WHO guidelines should be adapted to South Africa. Interventions are needed at all levels of the socio-ecological model in order to reduce hazardous alcohol use.”

CIVIL SOCIETY’S HIGH-LEVEL TAKEAWAYS: TOWARDS AN ACTION PLAN

Participants at the workshop came from various civil society organisations and sectors of government. Some worked in alcohol harms reduction (AHR), others worked in areas related to AHR, such as gender-based violence. All participants agreed that tangible steps need to be taken to address the stalled draft Bill. They raised the following points:

* Communities need to be informed about the draft Bill. The information in the Bill needs to be made accessible to the man on the street, and civil society and government should take collective responsibility for this. If communities are aware of the draft Bill, they can help support its implementation and enforcement.

* If the draft Bill is to be implemented, there needs to be a strong policy framework in place to ensure the objectives are met.

* It is imperative that a basket of restrictions be applied, as no single measure can effectively reduce alcohol harms.

* Civil society should seek to shift government departments’ mindsets about “negative” repercussions of the proposed draft Bill. Some government departments are resistant to the package of interventions because they fear negative economic effects. Civil society should inform them about the minimal negative impacts and myriad positive benefits.

* The economic mandate must be separated from the health and social development mandate. For example, the DTIC should be responsible for the economic mandate while the Department of Health and Department of Social Development are responsible for the health and social development mandate.

CONCLUSION

THE TIME FOR ACTION IS NOW!

It is hard to understand why government didn’t strengthen and action the Bill, based on the findings and recommendations of the Genesis Analytics study of 2017. Despite being paid for by an industry body, this study came out strongly in favour of the implementation of the Liquor Amendment Bill and the implementation of the WHO Global Strategy.

A comprehensive ban on alcohol advertising, reducing the availability of alcohol and increasing the price of alcohol are highly cost-effective, sustainable and implementable measures with compounding benefits. Together they can reduce mortality, gender-based violence and social fragmentation. There is a window of opportunity to change things, so government must act now on the stalled Bill.

Report compiled by Daniella Horwitz and Onesisa Mtwa

Onesisa Mtwa Innovation Director: Innovative and Inclusive Society onesisa@dgmt.co.za

Nickolaus Bauer Campaign Manager nickolaus@dgmt.co.za

DGMT is a South African public innovator through strategic investment. Our goal for South Africa is a flourishing people, economy and society. Towards this end DGMT currently distributes about R180-million per year and leverages and manages a similar amount of funding through joint ventures with other investors.