Billions of rand and thousands of jobs will be lost if the Department of Health goes through with its plan to ban liquor companies from advertising and sponsoring teams, say the liquor industry, analysts and the opposition.
The draft bill has been labelled draconian, short-sighted, misguided and devastating to jobs.
Already an advertising agency has launched a petition opposing the proposed law. Tshepo Matsepe, co-owner of advertising company Kena Media, is spearheading opposition to the ban.
The Department of Health has confirmed that there is a draft bill “being considered” regarding alcohol advertising in the country, but it still has a number of processes to get through.
On Tuesday the DA’s spokesman on health, Denise Robinson, will request a copy of the draft bill so that they can study the document.
According to reports, the department, headed by Health Minister Dr Aaron Motsoaledi, wants an outright ban on the liquor industry advertising and sponsoring events. The department has been working on the Control of Marketing of Alcoholic Beverages Bill.
Motsoaledi is on record as being “at war” with the liquor industry.
His spokesman, Fidel Hadebe, said the advertising and marketing of alcohol was “just one of the many avenues that are being considered as part of addressing this challenge”.
The DA and the alcohol industry have labelled the proposed draft bill draconian and loaded with unintended consequences.
The consensus, however, is that alcohol plays a huge role in abuse, crime and road accident deaths and injuries, and places a huge burden on state resources.
Banning advertising and sponsorships is not the answer, the DA’s spokesman on Trade and Industry, Wilmot James, said on Monday.
SAB said the bill had been drafted without input from the industry.
“SAB is profoundly disappointed and concerned by the decision taken by both the ministers of Health and Social Development to consistently refuse to engage with the alcohol industry, despite the fact that we agree that alcohol abuse is at unacceptable levels in South Africa.
“Both the ministries of Health and Social Development appear to be increasingly taking a prohibitionist view on alcohol, which has had disastrous consequences in those parts of the world that have gone this route,” SAB said.
The alcohol industry has traditionally been one of the strongest users of sponsorship to market its products and brands globally. It also spends billions on advertising, with R400 million alone going to the SABC.
Local alcohol brands can account for as much as 10 percent of total direct spend in sponsorship, close to R1 billion.
David Sidenberg, a partner at BMI Sports Info, said sponsorship spend in total in SA, including leveraging rights, came to R7bn.
The alcohol industry was one of the biggest sponsors of sporting events and their exit would be noticed and would be difficult to fill, he said.
James said that while alcohol abuse needed to be curbed, it was an “inappropriate and wrong-headed” response to the problem.
Adrian Botha, director of the Industry Association for Responsible Alcohol Use, said it had not been consulted. He said banning advertising and sponsorship would lead to thousands of job losses and freezing of market share. It would be difficult for black entrepreneurs to take on giants like SAB, he said.
At a recent conference called by the Department of Trade and Industry’s National Liquor Authority, banning of advertising and sponsorship had not been discussed, Botha said.
Therefore, the Department of Health’s move had “come out of the blue”. “No one has had any input at all and this could be the department going for broke,” Botha said.
Matsepe’s petition has been sent across the country and thousands have signed it. He was quoted as saying that the advertising industry was not opposed to raising awareness about responsible liquor trading and consumption, but he was concerned that severe restrictions would affect a number of industries, not only advertising companies.
Economist Dawie Roodt said the government was systematically taking away people’s right to be responsible. While he understood the rationale behind sin taxes and laws, he could not understand why the state thought they “can manage me”.
Sibani Mngadi, public policy and sustainability manager at Brandhouse, said they engaged directly with the government to promote responsible drinking, but “the proposed ban will not reduce alcohol misuse and will have an adverse economic impact”.
Brandhouse, in its engagements with the government, had focused on improving the effectiveness of responsible marketing codes.
Brandhouse sponsors the J&B Met, the Drive Dry Campaign, Brandhouse Number 1 Taxi Driver (with the Department of Transport), Responsible Drinking Media Awards, Amstel Class Act and the local broadcast of Uefa Champions League matches.
Vernon de Vries, Distell Ltd director for corporate affairs, said it was opposed to a total ban on liquor advertising.
“An advertising ban will favour those products which are already well established and will prejudice new entrants, thus impeding free market competition,” he said.
“As has been emphasised repeatedly by the president and the National Planning Commission, the creation of jobs remains South Africa’s single biggest challenge.
“Various economic commentators and the advertising industry have made a strong case regarding the job losses and unfavourable economic impact that will inevitably follow a total ban such as the draft bill proposes,” he said. “Distell is constantly engaging with the government about this issue and several others regarding the liquor beverages industry and we remain hopeful of an outcome that will achieve the nine steps set out in the National Planning Commission’s Vision 2030,” De Vries said.
Timeline for a bill not everybody wants:
In December 2010, Social Development Minister Bathabile Dlamini and Health Minister Aaron Motsoaledi announced steps to draw up new legislation to ban alcohol brands from advertising.
Late last year, Dlamini confirmed that severe restrictions on alcohol ads would be tabled before the cabinet within two months, focusing on location, time and space rather than a total ban.
Commentators said potential loss of jobs and income in advertising and sponsorships would run into billions.
In February, Motsoaledi announced that draft legislation for the ban would be released for public comment.
On Monday, Business Day quoted a leaked copy of the draft bill, saying it sought to: