Why Nedlac wants a new study to quantify cost of liquor bill
The National Economic Development and Labour Council (Nedlac) has commissioned a socioeconomic impact assessment of the Liquor Amendment Bill.
There was widespread dissatisfaction with the impact assessment presented to the council by government because it did not quantify any of the likely effects of the controversial measures on jobs, advertising revenue and the industry.
The government study was undertaken by the Department of Planning, Monitoring and Evaluation and while it conceded that the bill would result in a loss of advertising revenue and a loss of tax revenue for the state it did not attempt to calculate this cost. It also did not estimate the cost to the state of the harmful effects of alcohol abuse.
The Department of Trade and Industry’s chief director of policy and legislation, MacDonald Netshitenzhe, said additional research would be undertaken but pointed out it would not replace the government’s socioeconomic impact assessment. The new study is to be undertaken by research firm Genesis Analytics.
Netshitenzhe said the new research was expected to be completed by end-September, possibly delaying the submission of the bill to Parliament. There was a chance it would be tabled in Parliament in 2017, but if not it would be early in 2018.
The South African Liquor Brandowners Association (Salba) welcomed Nedlac’s decision to have an impact study undertaken. "We believe that the study will assist all stakeholders with interest and/or authority to approve to the bill to have an informed view of each of the proposals in the bill," spokesman Sibani Mngadi said.
"The research should quantify the impact of restrictions of alcohol marketing on jobs and revenue in various industries including media, marketing and adverting agencies. The research will also seek to establish if the proposed restrictions will have any effect on alcohol consumption."
Salba was highly critical of the government’s inadequate and "vague" socioeconomic impact assessment of the draft bill because of its failure to quantify the effect on jobs and the economy. This limited the ability of Nedlac social partners to engage meaningfully. Trade unions also pushed for a study to get a sense of the impact of the bill on jobs.
The liquor industry is opposed to the proposed amendments, which Mngadi says "will have far-reaching consequences for both small and big businesses in the alcohol industry. We believe it will lead to job losses when the country is facing a problem of high unemployment."
The bill proposes severe restrictions on the advertising of alcoholic products, including an outright ban of liquor adverts in newspapers; prohibits trading licences for alcohol outlets within a 500m radius of churches and schools; increases the legal drinking age from 18 to 21 years; and proposes to hold brand owners legally liable for damage that may be caused by consumption of alcohol.
The alcohol industry estimates that these restrictions will cause a R2.38bn loss to economy. The biggest loss will be for TV, which is estimated at R1.9bn; radio at R160m; and print at R260m.