Pietman Roos and Bathabile Dlamini debate the proposed restrictions on alcohol advertising.
Beware thin edge of the wedge that chips away freedoms and fails to achieve, says Pietman Roos.
Johannesburg - The proposed restrictions on alcohol advertisements are one example of government interventionism that has gone awry. While the intention to reduce alcohol abuse seems noble, it is certain that it will not achieve its goals, but rather introduce a host of highly damaging unintended consequences and would be counterproductive.
The constitution clearly provides that the government may infringe on the rights of citizens and companies alike, if the method is rationally linked to a legitimate government goal. Depriving convicted criminals of their personal freedom is a legitimate restriction of rights since it is necessary to ensure community safety.
The only goal that restrictions on alcohol advertising will achieve is that people will watch fewer alcohol adverts. Billions of rand will be lost in creative industries, media companies will lose a valuable source of revenue, barriers to entry for new liquor companies will effectively be raised and competition thereby reduced, all while alcohol consumption levels will remain unaffected. In short, the proposed restrictions will have a severe economic cost and will not achieve their goal by any means.
In fact, the proposed restrictions will make the business environment more challenging for legitimate businesses and pave the way for stronger entry of illegitimate companies and products. This is because marketing tools are an essential method to inform the public in their choices on consumer spending.
On legitimate liquor products, the packaging provides accurate information on what you are ingesting. This is definitely not the case for illegal distillers who don’t follow any health and safety guidelines. Before restrictions are imposed, legitimate alcohol producers have a marketing edge over unsafe illegal distillers. If these tax-paying companies can no longer communicate to the public why their brand is safe and influence consumer choices in their favour, many consumers may opt for “bootlegged products” which do not have to accommodate the so-called sin taxes.
Where responsible alcohol companies ensure the contents of their products are safe for human consumption, abide by the law, pay taxes, and institute corporate social investments to rehabilitate those afflicted by alcoholism, these illegal operators care little for the difference between ethanol and methanol and their revenues go towards funding further illegal operations.
An identical argument can be made for attempts to regulate the display of tobacco products. Earlier this year, the Department of Health published draft regulations to enforce a maximum size of 1m² to exhibit tobacco products for all retailers and there are further plans to introduce plain packaging.
It’s an open secret that between 30 and 40 percent of tobacco products are illicit. Making it more difficult for responsible tobacco companies to sell their wares to consenting adults opens the door for the possibility that illegal cigarettes with unknown carcinogens are accessible to consumers. Unfortunately, the trend of interventionism is not restricted to health and safety regulation.
A further economic area characterised by interventions is the mining sector.
The amended Mineral and Petroleum Resource Development Act provides that a mine must beneficiate its minerals to an extent to be determined by the minister in order to be allowed to export.
Merely extracting crude minerals from the earth requires a massive amount of energy, and most mines do technically beneficiate the minerals from rocks to standardised commodities.
But then the Carbon Tax Policy Paper proposes that energy-intensive industries (mines and manufacturers) must pay R120 for each of carbon emission ostensibly to incentivise energy efficiency.
A mining enterprise cannot escape this contradiction – it must beneficiate minerals and therefore use more energy, but that means it would also have to pay more tax.
Such interventionist policies fail to reach their goals, destroy economic value and hurt investor confidence.
Ultimately, the essential policy priority of job creation is hurt.
The question is why such obviously destructive interventionist policies ever see the light of day.
The fundamental root of the problem is that the government has been too quick to respond to policy issues by way of intervention and over time this has become a knee-jerk response.
There are many ways to look at alcohol abuse and also many determinants like individual education and public awareness of the dangers of alcohol abuse.
The way the problem is viewed obviously influences the way in which a response will be crafted, but it often seems as if the government can only make the assessment that there is not enough intervention. The practice of interventionism has become so entrenched it suggests that no industry is safe.
Given the bleak prognosis, what is to be done? The role of organised business and other levers of civil society are more important than ever. There is room to advocate for policy alternatives, and there is no need for the exchange of ideas to fester in a confrontational manner.
No one is saying that there is no role for the government in regulating alcohol and tobacco – in fact most members of the public would approve of awareness programmes and clamping down on illicit producers.
The government has a natural partner in the business community in fighting organised crime syndicates that sell dangerous unregulated products to an often-unwary public.
The real issue is about a balance between legitimate freedoms and smart regulations that carry minimal unintended consequences. Citizens and businesses alike must demand that their freedoms be respected.
Interventionism at its core is about influencing the fundamental decisions and freedoms of business and consumers.
South Africans must also realise that we deserve smart regulation. There is a huge difference between socially consuming a potentially addictive product and substance abuse, so similarly policy must be nuanced to reflect the different types of consumption activity.
While there is room to debate the degree to which the government may curb societal evils, society itself must be brave enough to declare that its freedom to consume is sacrosanct. It is wrong to assume that interventionism will stop with alcohol and tobacco advertisements.
It can very easily prohibit other freedoms that make up our lives.
* Pietman Roos is policy consultant at the South African Chamber of Commerce and Industry.
A law against liquor adverts may cost jobs, but drinking is costing 130 lives a day, says Bathabile Dlamini.
Johannesburg - The South African cabinet has made a decision to publish a draft bill that aims to ban the marketing and advertising of alcohol. The proposed ban is part of a package of best practice measures recommended by the World Health Organisation (WHO) and aimed at reducing alcohol-related harms.
The other WHO “best buys” that were also discussed and agreed on at the inter-ministerial committee that I chair include better regulation of the time and sales of alcohol, stricter drink-driving laws and increasing the cost of alcohol through taxation. These form a package aimed at reducing the supply and demand for alcohol with the sole purpose of promoting the health of South Africans and reducing deaths, disabilities, violence against women and children, and a host of other health and social ills associated with the harmful use of alcohol.
Perhaps my starting point would be to sketch out what we know about alcohol and its impact on South African society in a bit more detail. Alcohol is a drug, albeit a legal drug, that is harmful to the user and is harmful to others. Alcohol is the leading risk factor for disability adjusted life years. These are years lost due to premature deaths and time lost to poor health. In South Africa, alcohol is the third leading cause of death. It fuels crime, the breakdown of families, communities and plays a role in economic problems such as joblessness and poverty.
All the credible studies done in South Africa on gender-based violence, especially that against women and children, indicate the extent to which alcohol contributes to the high levels of such violence. If the violence against women in South Africa is termed the “internal war”, then alcohol, poverty, and inequality are the soldiers in this war, and patriarchy is the general.
Despite large numbers of South Africans being teetotallers, we are among the countries with the highest average individual consumption of absolute alcohol a year. We are the second-highest for what are described as harmful patterns of drinking and the highest for heavy episodic drinking. While these numbers benefit liquor producers financially, these levels of consumption are indicative of the harms associated with alcohol in our country.
In a Medical Research Council article, researcher Charles Parry writes that about 130 people a day die of alcohol-related causes. This includes injuries, Aids, and non-communicable diseases such as cancer, liver and cardiovascular diseases.
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.
With respect to the proposed ban on advertising, it is worth repeating that it is one of the recommended strategies by the WHO in its Global Strategy to Reduce the Harmful Use of Alcohol and the Status Report on Non-Communicable Diseases 2010. Several other countries have partial or complete bans on alcohol advertising. These include France, Norway and Sweden. At the same time, based on evidence from the WHO and agreements made by member countries at the World Health Assembly, many other countries are engaged in discussions and policy processes wherein bans on alcohol advertising are being considered as part of a package to reduce alcohol-related harms.
Public health research evidence, based on studying the impact of bans on alcohol advertising in 23 countries over 26 years, found an effect of decreased consumption when applied in tandem with other measures such as price hikes and regulating times and locations for the sale of alcohol.
The government is cognisant of South Africa’s needing a package of strategies to reduce successfully alcohol-related harms. At the same time, evidence here and abroad has indicated that voluntary bans and self-regulatory codes are unreliable and inherently unstable.
Also, contrary to the liquor industry’s view that it influences only brand choice, studies in several countries have established that alcohol advertising influences young people’s behaviour, normalises drinking, serves to embed positive beliefs about drinking, and encourages young people to drink sooner and in greater quantities. In papers on the issue, Parry cites research done in the UK where internal company documents refer to the need to recruit new drinkers as opposed to motivating drinkers only to switch brands.
A five-country study also concluded that young people between the ages of|13 and 17 were specifically targeted by alcohol advertisers. Similarly, in a paper titled, “Alcohol Consumption and Advertising Bans”, Henry Saffer cites firm-based research that found advertising increased sales.
New sales of alcohol come from two sources. These are new sales of alcohol to customers who would have purchased from rival firms, and new sales to customers who would not have purchased the product or would have purchased less of it.
This indicates clearly that advertising is about increasing the market through increasing consumption as well as about competing with other brands for market share. In a nutshell, the more people there are who drink through being actively encouraged to do so, and the more that drinkers increase their consumption, the higher the profits are for the liquor producers. This is not good news for society, as when more people drink, the harms associated with alcohol invariably increase.
While the government is sympathetic to the potential for job losses in the advertising industry if the proposed bill is passed, we have to act to stop the carnage. Industry-sponsored research estimates that about 12 000 jobs may be lost. Evidence tells us that 130 people a day die of alcohol-related causes, and this is clearly a more pressing issue when public policy around reducing alcohol-related harms is being discussed.
A similar package of policies was implemented in relation to tobacco harms, and the evidence shows a marked decrease in tobacco consumption. A decrease in alcohol consumption would lead to a decrease in health problems and contribute to efforts to decrease rapes, violence against women and children, and deaths and injuries owing to alcohol-related causes. The sole aim of the package of policies aimed at reducing alcohol-related harms is to save lives, reduce violence and build a healthier society.
Alcohol is legal drug and, based on its harms, it is already a controlled substance. There is no intention to prohibit its sale or consumption, but it would be irresponsible for a caring government that has evidence of its harm to society to allow the continued unfettered marketing and sale of what is no ordinary commodity.
* Bathabile Dlamini is the minister of social development.
** The views expressed here are not necessarily those of Independent Newspapers.