27 Sep 2013 Liquor industry gets ready to fight off ban
The cabinet last week gave the nod to the Control of Marketing of Alcohol Beverages Bill. It was scheduled to be gazetted Wednesday and it will now go through the parliamentary procedures, including public comment.
The liquor industry’s representative body, the Association for Responsible Alcohol Use, has come out in vocal opposition to the proposed law.
Mike Mabasa, the association’s spokesman, said yesterday: “Our stance is clear. We do not believe that banning alcohol advertising will reduce alcohol consumption.
“Research has shown that there are more than 20 countries around the world where alcohol advertising has been banned… there was no great downturn in usage.”
The alcohol advertising ban has been driven by the Health Department and in particular by Health Minister Aaron Motsoaledi, but last Friday Social Development Minister Bathabile Dlamini said the intention of the bill was to cut people’s exposure to the advertising and promotion of alcohol.
“The harmful use of alcohol has significant negative impacts on individuals, families, communities, the economy and the country as a whole,” she said, arguing that advertising influenced behaviour negatively.
“In a Medical Research Council article, researcher Charles Parry writes that about 130 people a day die of alcohol-related causes.
“The resulting economic costs are enormous and the tangible and intangible costs associated are far in excess of the contributions the alcohol industry makes to the fiscus,” she said.
But Mabasa – whose association represents the retail and wholesale sectors as well as producers including wine estates, Distell, SABMiller and Brandhouse – said the industry did not believe that an advertising billboard, for example, in Sandton, had any impact on the behaviour of consumers in a place like, say, Lusikisiki. It was in such rural townships that the real problems of alcohol abuse occurred.
“The [alcohol] problems are mainly in historically disadvantaged areas,” he said. Instead of a ban on advertising there should be targeted interventions to change abusive behaviour.
Advertising, he said, informed those who were already drinking of different products available in the market. It was the wrong place to tackle the social problems.
Many of the problems were associated with liquor products that were home brewed and were potentially dangerous, he pointed out.
Interventions should focus on education and responsible alcohol use in the advertising, it was suggested.
Motsoaledi, however, has asked the National Treasury to establish a mechanism to collect an additional levy on alcohol products to compensate for a R1.7 billion loss in government revenue if there were to be an ad ban.
It appears that the government is not united about the ban. The Treasury has rejected the proposal for a levy but has given guarded support to an increase in alcohol excise duties.
In a statement, the Treasury said an inter-ministerial committee for combating alcohol and substance abuse, which had been established in 2010, had proposed the introduction of “an earmarked levy”.
It reported that the committee had proposed a 1 percent levy on alcohol sales and the conversion of the Department of Trade and Industry’s licensing condition that required the liquor industry to contribute 1 percent of all sales to mitigate harm caused by alcohol. It was suggested that this revenue would be “ring-fenced” and administered by a board.
While a global figure for alcohol advertising spend is not available, the Treasury said the Department of Sport and Recreation had estimated that sports bodies would lose up to R650 million in direct sponsorships, advertising in stadiums and publications.
More reaction from industry…
Chamber of Commerce and Industry policy consultant, Pietman Roos, said the proposed restrictions on alcohol advertisements would be counterproductive.
“All that the restriction on alcohol advertising will achieve is that people will watch fewer alcohol adverts. Billions of rand will be lost in creative industries so the proposed restrictions will have a severe economic cost and will not achieve the department’s goal,” he said.
Pernod Rickard marketing manager, Seth Pereira said the law was detrimental to brands and to the country. “The big brands that are already committed to the consumer’s memory will continue to thrive, but start-ups and upcoming brands will struggle to survive if they are unable to market themselves,” he said.
Source: Business Report; BDLive
Additional reading:
ARA appeals to cabinet to consider economic implications of alcohol ad ban