Western Cape Business News

Send  Share  RSS  Twitter  21 Jun 2012

LIQUOR: Beware Unintended Results


Recent Western Cape Business News

NEW plans to curb the sale of alcoholic beverages could have some far-reaching and unintended consequences, warns the Cape Chamber of Commerce and Industry.

The advertising ban could save the industry a fortune in advertising and marketing costs and this could lead to bigger profits for liquor companies and possibly cheaper drinks for those who abuse liquor,” said Mr Michael Bagraim, President of the Chamber.

What the government did not seem to understand was that advertising did not promote drinking as such but brands. “It is about choice and quality and not about encouraging people to drink more.”

Without advertising to promote brands and quality, the competition between different manufacturers would move to price and cheaper no-name brands would thrive. That would increase the social problems stemming from alcohol abuse and not reduce them.

If the government increased excise duties to keep prices up, smuggling, home brewing and home distilling would increase and much of the liquor industry would go underground where it would be more difficult to control. Organised crime would find the situation very attractive.

There is a tipping point where excise duties become so high that smuggling and other illegal activities become profitable. “This is already happening in the tobacco trade and the government is losing billions of rands a year in excise duties from cigarettes smuggled into South Africa and sold on the streets.”

Mr Bagraim said that on the surface the idea of banning liquor sales to people under the age of 21 seemed attractive, “but how do you justify it when people can vote, drive cars and join the army at 18? In any case, the provision would be difficult to enforce as it would be easy to persuade an older friend to make the purchase for you.”

He said the government was right to be concerned about the abuse of alcohol but there were no simple solutions. “If we could uninvent alcohol tomorrow I would be all for it, but the fact is that wine and beer have been a feature of civilised life since Egyptian and Roman times, before advertising was invented. That is the reality and the only way to deal with abuse is through diligent enforcement of the regulations and education. It’s the hard way but it is the only way.”

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