Johannesburg - The government’s proposed ban on liquor ads may not be the most appropriate policy response to alcohol abuse, given the damage it is likely to do to the media industry and the fact that international experience has shown that such restrictions may be ineffectual.
These points were made by Econex in a research note released yesterday, in which the consultancy warned of the cost and employment implications for media firms of such a ban. It noted that similar policies elsewhere had not necessarily delivered the desired impact.
The note discusses a variety of policy options that may be better suited to South Africa, such as pricing regulation and taxation, restrictions on alcohol availability, direct drunk-driving interventions, community mobilisation, education and public awareness, and interventions in the drinking environment.
Econex offers in-depth economic analysis in competition economics, international trade, strategy, and regulation.
Health Minister Aaron Motsoaledi has pushed for stringent measures to curb alcohol abuse, such as banning alcohol ads.
Major alcohol companies say the proposed ban would have a devastating economic impact, projecting it would cost the economy up to R7.4 billion and cause a loss of jobs.
They say almost 12 000 jobs would be lost in related sectors such as the media and sport.
Econex says the issue of alcohol abuse and the damage it inflicts on the economy has gained a lot of attention, encouraged by a recent report in the South African Medical Journal, which estimated the damage equalled 10 percent of the country’s gross domestic product in 2009.
Econex says: “These findings provide some support for the Control of Marketing of Alcoholic Beverages Bill that was published in 2013.
“However, a finding of 10 percent means that the total cost of alcohol abuse exceeds South Africa’s total annual health-care expenditure (public and private).”
Econex says in order to aid the government in its decision surrounding the bill, the Department of Health is expected to appoint a service provider that will conduct a regulatory impact assessment to measure how much the liquor industry could suffer from a ban on alcohol advertisements.
“It is therefore imperative that such estimates of the effect of alcohol on the economy be at least credible in terms of relative benchmarks, as this will inform policy decisions.”
It says research shows advertising restrictions are ineffective and do not have a significant impact on alcohol-related harm. One of the many possible reasons is that they can be circumvented relatively easily due to the gap being filled by advertisers on the internet and other digital media.
Econex says South Africa’s current response to deal with alcohol-related harm is highly fragmented. This fragmentation exists between different government departments as well as between different levels of government.
“This issue clearly needs to be addressed in order for a coherent policy to be developed and implemented,” it says. “Such a coherent policy should include a package of complementary interventions.”
Econex says one of the constant themes in South Africa is the fact that the effectiveness of different interventions rely on proper enforcement.
“The authorities are, in many instances, simply without the necessary capacity to implement policies consistently and constantly. Interaction with other affected parties, such as community groupings and industry, contributes to capacity building within the authorities and might lead to better implementation and enforcement.”