According to Federated Hospitality Association of South Africa’s (FEDHASA) CEO Tshifhiwa Tshivhengwa, the proposed Draft Liquor Amendment Bill of 2016 is set to complicate South Africa’s liquor regulatory environment even more, which is an already complex environment with more than 40 national and provincial liquor-related policies and regulations.
“There is currently a confusing and fragmented proliferation of legislation which raises significant challenges and difficulties in effectively regulating the liquor trade in South Africa,” he says. “Instead of addressing this, the proposed Amendment Bill fosters even more issues.”
A call for a standardised approach to liquor licensing and liquor trading
FEDHASA represents the interests of over 10 000 direct and associate members in the South African hospitality industry including hotels, B&Bs, guest houses, game lodges, restaurants, pubs, taverns, shebeens, conference centres, and casinos. In its submission to the Department of Trade and Industry (DTI), FEDHASA has called on the director-general to persuade provincial governments to adopt a standardised, pragmatic approach to all aspects of liquor licensing and liquor trading in South Africa.
“What would make sense,” Tshifhiwa points out, “is that the DTI works towards a single national liquor act, a single provincial liquor act and a single bylaw that provides for the trading days and hours of on- and off-consumption liquor licensed establishments which can be enforced by all local municipalities.”
However, it is not just the possibility of a promulgation of yet another piece of liquor-related regulation that concerns FEDHASA. “Unfortunately, the draft legislation has also not been subjected to economic impact assessment,” says Tshifhiwa. “If this law comes into effect, several of the proposed amendments will have detrimental impacts on all the many stable, good businesses that are making an important contribution to our economy. Some of the amendments will be all but impossible to regulate, thus placing an extraordinary burden on the administrators responsible for controlling the liquor trade in South Africa.”
Age limit for drinking
Amongst the controversial proposals is the prohibition of selling alcohol to citizens or visitors between the ages of 18 and 21. FEDHASA points out that with regard to South Africans, this age range could simply be unconstitutional. “If a citizen between the ages of 18 and 21 is eligible to join the defense force, vote, drive a motor vehicle, get married and enter into a legal contract, they should undoubtedly be permitted to consume alcohol in a responsible manner,” Tshifhiwa points out. Apart from encroaching on personal freedom, the raising of the age limit for legal drinking would have a damaging impact on hospitality businesses particularly in university and holiday towns.
How will the Draft Liquor Amendment Bill of 2016 affect the hospitality industry?
Another problematic clause is this one regarding the proximity of a liquor licenced establishment: “The manufacturing, distribution or retail sale of liquor in either rural or urban community is prohibited on any location that is less than five hundred (500) metres away from schools, place of worship, recreational facilities, rehabilitation or treatment centres, residential areas, public institutions and other like amenities.
“This is an astonishing proposal and yet another example of how this draft bill seems not to have been thought through properly at all,” Tshifhiwa says. “Most of the country’s B&B’s and guesthouses, local neighbourhood restaurants, many hotels across the way from say a park or a beach promenade and lots of pubs down the road from post offices would all be unable to secure a liquor license. It would literally mean that the only establishments that could sell liquor in South Africa would be far out in the wilderness somewhere. It is clearly not a practical or beneficial idea.”
Part of the problem, Tshifhiwa points out, is that the proposed Act has not been subject to an economic impact assessment process. “This is something we would welcome,” he says. “There would then be absolute clarity for all parties on how this legislation would affect the country’s vital hospitality sector.”
What do liquor owners think?
Ninety-three percent of small business owners in townships expect amendments to the Liquor Act to damage their businesses.
This is according to a survey conducted by the Gauteng Liquor Forum, the SA Liquor Traders Association and the National Tourism Hospitality Association, which represent the interests of 35 000 small businesses.
The survey was held after the Department of Trade and Industry proposed to introduce the amendments to the Liquor Act 59 of 2003.
The amendments propose that the legal drinking age be increased from 18 to 21, among other restrictions.
The survey found that:
- 87% said the laws would create unnecessary problems between businesses and patrons;
- 75% said it would increase police corruption;
- 83% thought the laws would force them to close their businesses; and
- 95% said these laws would criminalise small businesses.
Liquor Traders Association president Mish Hlophe said small business owners would be the hardest hit by the amendments.
“By adding laws that are not feasible or workable in the township environment, the ministers are pushing us into crisis,” Hlophe said.