COMMENTS to the DIRECTOR-GENERAL OF THE DEPARTMENT OF TRADE AND INDUSTRY (for the attention of Ms Nkoe Ramphele)

03 April 2017
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COMMENTS

to the

DIRECTOR-GENERAL OF THE DEPARTMENT OF TRADE AND INDUSTRY

(for the attention of Ms Nkoe Ramphele)

 

About the proposed

DRAFT LIQUOR AMENDMENT BILL

[Made known under Vol. 615 of 2016]


 

New Policy reiterates the need to give priority to facilitating entry and empowering entrants

We note with approval that the National Liquor Policy reiterates that the 1997 Policy consideration of “giving priority to facilitation of entry” remains a critical challenge today.

The Policy notes that the results of apartheid liquor policy were countless raids, harassment, arrests, prosecutions and imprisonment of black South Africans. Also, it led to social breakdown, family violence, alcohol related diseases, crime and accidents in poor communities. A large illegal liquor trade mushroomed in the townships.

However, the new Policy contradicts the 1997 Policy, and will not in fact facilitate entry or empower new entrants, as well as denying lawful opportunities to consume alcohol for the youth.

There can be absolutely no doubt that if implemented it would prevent restructuring, entry and empowerment. Indeed, those are its stated objectives, namely to reduce the number of outlets, the number of areas in which outlets will be lawful, and the ease of entry.

The problem will be compounded by the fact that they set out to limit access to liquor, prevent advertising and marketing, and substantially reduce the number of people who can lawfully consume alcohol.

Short history of apartheid liquor laws

The prohibition act of 1897 made it illegal for black South Africans to drink alcohol. It led to organised crime and illegal drinking establishments named shebeens. Many Africans were arrested for alcohol-related offences. Shebeens continued to thrive after the 1927 Liquor Act, which among other restrictions prohibited Africans and Indians from selling alcohol.

In the 1930s, the government introduced beer halls which were government owned and the only places black South Africans were allowed to buy beer. A beer hall was typically a bleak, brick structure which sold tickets to drinkers, who moved through turnstiles to collect their cartons of traditional beer. Workers referred to the experience as “drinking in a cage”. They were only sold traditional sorghum beer.[1] There were laws governing how much liquor black South Africans were allowed to carry. If they carried more than allowed it was a criminal offence and they were considered traders. Thus if they bought enough for a wedding or a funeral and were caught they would be called criminals.

Whites were considered responsible and respectable enough to buy and consume as much liquor as they wished, and to own liquor stores and sell liquor. Blacks were presumed to be incapable of responsible liquor trade or consumption. Their dignity as responsible adults was undermined.

In 1957, a sixth of all convictions of Africans were for statutory liquor offences. In 1960, the Malan Commission of Inquiry’s report stated that black people were able to obtain liquor through illicit channels at high prices, and it was often in an adulterated form. The Commission concluded that to apply the Liquor Act was impossible in the current era, and recommended changes in the law. Amendments easing restrictions were consequently passed.

In 1961, shebeens were legally allowed to sell “white men’s liquor”. In 1962 the apartheid government opened some sales to black South Africans. However, black South Africans could still not drink in “white areas”, but they could now buy commercial beer at off-sales or white outlets. Yet they weren’t allowed in the general liquor stores and there was still a legal maximum to how much beer they could carry or buy. Following these changes the government then allowed liquor sales in black areas, but in night clubs and restaurants only and not bottle stores. The alcohol could only be bought with a meal. Then they allowed on-consumption without a meal, then finally off-consumption, strictly licensed.

All the way along the process, the reduction of liquor regulation for blacks resulted in less liquor abuse, less crime, fewer accidents and less violence.

 

Policy will effectively reinstate apartheid liquor policy

The new National Liquor Policy is fundamentally and absolutely the opposite of what was envisaged in 1997.

The idea in 1997 was to reverse the legacy of apartheid liquor law, whereas the current proposals will effectively reinstate apartheid policy.

The new Policy will result in the liquor trading conditions and illicit production that prevailed under the apartheid liquor policy, with countless raids, harassment, arrests, prosecutions and imprisonment of (mainly) African people.

The Policy will lead to an ever-increasing informal liquor segment where many unlicensed liquor outlets will continue to operate.

The Policy will again lead to social breakdown, family violence, alcohol-related diseases, crime and accidents in poor communities. A large illegal liquor trade will again mushroom in the townships.

 

New Policy will reverse transformation gains

Under apartheid there was, for practical purposes, no lawful liquor trade in black hands. There are many thousands of lawful liquor outlets owned or managed by blacks now, and millions of black consumers now lawfully consume alcohol.

It is, however, true that there has not been as much transformation as there would have been had the process of liquor law liberalisation during the declining years of apartheid and the early years of democracy been continued. To the extent that elements of apartheid liquor policy survived and were not repealed in the new South Africa, the pace of transformation was retarded.

The only way to end “the slow pace of transformation” is to do the opposite of what is proposed, namely to complete the process of relaxation and repeal.

Not only will what is proposed slow down the pace of transformation, but it is likely to cause transformation to cease completely, if not be reversed.

 

Making more activities illegal will lead to more illegal activities taking place

The Policy also proposes severely limiting the places and people that can sell alcohol; no application can be granted to areas which aren’t expressly for trading in liquor as well as service stations and public transport facilities, and trading businesses may not be within 500m from schools, places of worship, recreational facilities, etc.[2]

Illegality is, logically, the consequence of law. If something is prohibited, doing so is by definition illegal.

If more activities are made illegal as proposed, it must inevitably and obviously result in the opposite of eradication, namely expansion of illegal activities.

To eradicate illegality or substantially reduce it, the opposite of what is proposed will have to be done, namely relaxation and repeal of the legal prohibitions.

Our observations here are not a matter of opinion, they are objective incontestable facts.

More prohibitions will multiply existing capacity and enforcement constraints

What is proposed will increase demands and expectations on the national authorities substantially and will multiply rather than reduce “capacity and enforcement constraints.”

We submit that an effective and legitimate liquor policy should envisage a liberated, emancipated and empowered South African population in which liquor abuse is minimised by enforcing a minimum number of laws properly and by promoting a widespread appetite for responsible alcohol consumption.

 

Authorising Minister to impose marketing restrictions will give undue power to executive

The draft bill proposes the legislature delegating to the Minister the determining of restrictions and parameters for advertising and marketing of liquor products.

There has been a deeply disturbing tendency during recent years to transfer law-making functions to the executive and to render the legislative branch of government increasingly redundant.

This is extremely undesirable for philosophical and practical reasons. The purpose of a democracy is to prevent power being concentrated in the executive and to ensure that laws are made by elected parliamentarians who exercise public scrutiny and participate in debate.

Advertising and marketing restrictions impair consumer rights

Restrictions on advertising and marketing are restrictions on the rights of producers and suppliers of alcohol.

The more important rights that this proposal seeks to assail, however, are the rights of consumers. There are various reasons for this. There are only two formal consumer bodies in South Africa. They are thinly stretched trying to address literally thousands of concerns regarding consumers and hundreds of laws affecting them at all three levels of government.

One of the most fundamental consumer rights is the right to information and the primary source of consumer information is marketing and advertising.

 

Proportion of total consumption that constitutes abuse not quantified, likely small

The premise behind this liquor Policy, rightly or wrongly, is that liquor sometimes has adverse effects.

But the proportion of the total alcohol consumption that constitutes “abuse” has not been quantified.

It is however clear from casual observation that virtually all liquor is consumed in ways that cannot reasonably be called “abuse”. Proposing such an extreme set of measures for what may well be a proportionately small part of the overall consumption of liquor is “cracking a nut with a sledgehammer”.

 

Making suppliers liable for accidents and crimes will be iniquitous, unworkable and costly

It is proposed that, should retailers serve liquor products to an intoxicated person and that person is involved in a motor accident or crime related to substance abuse, then the manufacturer, distributor and retailer should bear liability for any harm or damages. [3]

We submit that this proposal that liquor suppliers should be vicariously liable for other people’s actions is unfair and unreasonable.

Manufacturers have no control over the drinker. They are so far removed from the end drinker that they cannot, under any sane proposition, be considered liable for his or her actions.

It would be like holding a motorcar manufacturer liable for anyone’s reckless driving, or a pharmacy liable for a person’s committing suicide by taking an overdose of sleeping tablets. Even the apartheid regime did not think of anything as absurd as blaming supermarkets for selling knives to people who stab victims.[4]

Apart from the injustice of this idea, it is unworkable and impractical.

To require a retailer, perhaps an unsophisticated canteen owner in a rural village, to be able to identify “intoxicated persons” expects the impossible. There is no objective definition of intoxication.

Mindful of this fact, the law regarding driving under the influence of alcohol relies on a scientifically objective test, namely the quantity of alcohol in a suspect’s blood. It should be noted that this is not a test of intoxication. People with relatively high proportions of alcohol in their blood often and easily pass intoxication tests.

Clearly retailers cannot be expected to perform blood tests on customers as police do. How then are they to establish intoxication? Standard methods – there is no uniformly recognised protocol – include asking people questions, such as requiring them to do simple arithmetic or to recite the alphabet. Clearly such tests can be performed only on literate people and would discriminate against less sophisticated consumers.

Other tests involve physical activity such as asking a suspect to walk on a line painted on the surface of a road or floor, or to balance on one leg. All such tests presuppose physically or mentally healthy and sophisticated people. A disabled person or someone with arthritis would fail such physical tests; elderly people might appear intoxicated when completely sober.

It is also unrealistic to expect suppliers to establish whether patrons are “intoxicated”.

A person who drinks to excess might not be intoxicated at the time they leave a liquor outlet. They might later be involved in a motor accident or crime. Police tests might establish that they were extremely intoxicated at the time of the accident or crime. A completely innocent supplier might be liable for unfortunate events that follow.

Another practical problem with the proposal is that liquor might be purchased by, for instance, an intoxicated host for consumption by his or her guests. An intoxicated person might purchase alcohol from an off-consumption retailer for consumption many days later.

Of the many other conundrums and complications that present themselves, we mention another by way of illustration, namely that an accident or crime involving an intoxicated person might not be a result of their intoxication.

The term “alcohol-related” is ambiguous because it refers only to the fact that one of the people involved in an accident or crime might have been intoxicated, without it being clear whether the intoxication caused the harm. If an intoxicated driver is stopped innocently at a red light and rear-ended by a sober driver, the accident is still called “alcohol related”.

Legitimate concerns about “drunk driving” easily lose sight of the fact that the vast majority of accidents are caused by sober drivers. If an innocent person is injured in a collision, they suffer injury even when the wrongdoer is sober. Yet nobody proposes prohibiting driving while sober.

It is not clear why the proposal refers generally to “substance abuse”. Nor is it clear which substances are referred to.

Fundamental principles are at stake. One person should never be liable for the misconduct of another, unless they can be shown according to long-established principles of common law to be an accomplice. If supplying liquor to an intoxicated person amounts to culpable conduct, long-established law is perfectly capable of holding the supplier liable. People are held responsible for the consequences of their actions.

This proposal seeks to impose liability where none exists. Such matters should be left to the ordinary law and the courts. There is no need for new legislation.

 

Restricting trading hours will encourage more readily-available illegal concoctions

The draft Bill aims to restrict trading hours for the sale of alcohol. Liquor authorities and municipalities need to control access to liquor by restricting trading hours.[5]

Restricting trading hours will drive drinking into the black market and underground. The effect will be the opposite of what is intended.

We know from painful South African experience that the initial prohibition and subsequent severe limitation of alcohol “availability” for all South Africans, especially black South Africans under apartheid, did not result in less consumption.

It had the opposite effect, as the DTI acknowledges. It resulted in complex criminal markets and liquor abuse on a despicable scale. Limited availability of legitimate alcohol generated a vast market for informal concoctions with many names such as barberton, skokiaan, peach brandy and the like.

The liberalisation of liquor policy and the normalisation of alcohol as a legitimate right of consumers led to the virtual elimination of a criminal liquor industry.

We understand that it can be superficially assumed that limiting availability and access by restricting trading days and hours will lead to less consumption. But a moment’s reflection shows this to be without substance. The world is replete with examples.

Some European countries such as the United Kingdom introduced severe limits on trading hours during the war which endured into the 1980s. The well-known effect was that when “last rounds” were called, people would order more liquor than they might otherwise have done. They were forced by time constraints to drink it expeditiously. When it was recognised that the law was entirely counter-productive it was scrapped and liquor may now be freely purchased at any time in the UK.

Some central European countries have never had any liquor law to speak of. Liquor is literally sold always and everywhere even over a garden fence in a residential area. Liquor abuse in such countries is less common simply because everyone knows that they can get liquor readily whenever they wish.

Restricting trading hours will encourage the supply of illegal concoctions that are more readily available than legitimate liquor from licensed outlets with restricted opening times. The proposed reintroduction of limited hours and outlets that characterised apartheid liquor policy was a patronising and demeaning insult to human dignity. It is inappropriate in the extreme in the new South Africa, and should not be considered for reintroduction.

 

Unjust to prevent young adults from drinking responsibly until they turn 21

See attached research document

The draft Bill proposes that the Minimum Legal Drinking Age (MLDA) be raised from 18 to 21 years.[6]

The current drinking age of 18 has logic. Eighteen-year-olds can drive and vote and marry and pursue a career and enter into contracts and go to war.

It would be anomalous if they are allowed to make all big decisions in life but cannot decide whether to have a drink with a meal or a mate.

All right-thinking people would want to imbue people with a responsible attitude to drinking at an early age. If the right to consume liquor is deferred to the age of 21, the introduction of responsible behaviour is unwisely delayed.

An age limit of 21 will never be properly enforced.

This proposal will drive people younger than 21 but older than 18 to go underground and to drink illicitly in more dangerous circumstances with less emphasis on responsible drinking. Unlike respectable establishments serving alcohol legally, where responsible drinking is an encouraged culture, young adults will be forced into buying alcohol illegally at more unsavoury establishments.

This was evidenced when alcohol was prohibited to black South Africans and illegal shebeens first started. Alcohol in shebeens was often brewed illicitly and mixed with methylated spirits.

Raising the legal age will push underage binge drinking into less controlled environments, leading to more health and life-endangering behaviour among young people. They will not be in environments where they are surrounded by seasoned seniors who can set a good example and watch them for safety reasons.

Astounding distance rule is ill-considered, unjust, inconvenient, and unfair to poor

The draft Bill proposes that liquor premises be located at least half a kilometre (500m) away from schools, places of worship, recreation facilities, rehabilitation or treatment centres, residential areas and public institutions. No liquor licences shall be issued to premises attached to petrol service stations, premises near public transport, and areas not classified for entertainment or zoned by municipalities for purposes of trading in liquor.

This provision is biased toward wealthy elites living in spacious neighbourhoods. Introducing such a rule in low-income and high-density areas will discriminate against the poor. Blacks will be forced to buy from whites.

There is a Muslim place of worship in Sandton City.[7] The provision will make all alcohol sales in restaurants and hotel bars within half a kilometre illegal.

If a hotel has a chapel, the hotel will be forbidden to sell liquor. A hotel near a church could not serve alcohol via room service or stock the minibars in its rooms with alcohol.

It is not clear why there should be no liquor retail outlets in half a kilometre of a place of worship. Are worshippers especially prone to alcohol abuse? Will it affect the use of sacramental wine in Catholic churches?

This proposal is impractical to the point of craziness. It would turn many forms of normal, legal behaviour into criminal behaviour

The inevitable consequence of such a measure is that people will drink far from their homes. Resurrecting apartheid’s “radius law” in this way means that only middle- and high-income people with private transport will be in easy reach of liquor outlets. Preventing poorer people from buying liquor near public transport will, as before, require them to walk or cycle after drinking. Mugging, rape and alcohol-related accidents will increase.[8]

What the law should focus on is people committing criminal acts regardless of whether intoxicated or where they became intoxicated.

In the British tradition of the village pub, having liquor close to home is preferable to having to travel far away.

The government should instead promote responsible consumption and make it convenient and accessible.

After lamenting apartheid liquor policy, the new Policy proposes its reintroduction. As explicit racism is unconstitutional, sanitised surrogates are concocted. A non-racial veneer conceals such ingenious stratagems as requiring liquor outlets to be in “zoned areas”. Formerly black areas were dormitory towns without zoning, and the proposal amounts to apartheid disguised. In the absence of zoning, a lucky or corrupt few will be given apartheid-style “consent use”.

To this day, most townships have no properties zoned for business purposes. Consent use is difficult and expensive to get.

To require zoning in black communities should not be considered until all historically-black cities have proper town-planning schemes with enough property zoned for business purposes to serve all community needs.

Policy harms emerging businesses in entertainment, catering, manufacturing, retail

The draft Bill proposes that, to address the issue of transformation, the national liquor authority must be empowered to ensure that licensing conditions articulated in the Broad-Based Black Economic Empowerment Codes of Good Practice are imposed and strictly monitored. Non-compliance with these Codes should result in suspension or revocation of the licence.[9]

It is paradoxical for a proposal to severely limit opportunities within the industry from production to consumption, and then in the same breath talk about opportunities and transformation and empowerment.

This proposed new Policy would have precisely the opposite effect, and entrench existing large and sophisticated operations capable of complying with the law.

Curtailing advertising, information about brands, product availability and prices, combined with fewer outlets, will eliminate competition, especially from emerging businesses in entertainment, catering, manufacturing and retailing.

 

Unwise to harmonise provincial and national laws

The draft Bill proposes that harmonisation of the provincial liquor statutes with the national Act should be encouraged, and monitored for timely implementation.[10]

Liquor licensing is an exclusive provincial competence under the Constitution. Failure to recognise this is what led to the ruling by the Constitutional Court against the 1997 bill. President Mandela, as a trained lawyer, personally refused to sign the bill into law after it had been passed by all parties in both houses. He referred it to the Constitutional Court which agreed with him that central government interference in liquor licensing is unconstitutional.

 

Far from the central government trying to promote or impose “harmonisation”, it should accept South Africa’s allocation of powers to provincial and local government. The Constitution’s values and objectives are the opposite of harmonisation. They are to promote and protect diversity.

A practical benefit of a multiplicity of diversity is the “demonstration effect,” whereby it can be seen within one country which provincial policy works best.

Uniformity is undesirable. Nobody knows all optimal solutions in advance. Everyone can benefit from different policies, to discover which approach has better results than others.

 

Appoint police as inspectors where necessary

The draft bill proposes that, to enhance capacity in the transformed national and the provincial liquor authorities, provision should be made for South African Police Service officials to be appointed as inspectors under the relevant legislation, where necessary to complement existing capacity. The enhanced capacity will assist in monitoring and enforcement in the liquor industry.[11]

This may well be an appropriate and legitimate government response to its concerns.

But if police are not policing the unlicensed trade properly now, it is doubted that designating them as inspectors of the licensed trade will improve policing the unlicensed.

Enforcement of new liquor restrictions will reduce resources that could be used for the enforcement of other laws, leading to reduced deterrence of crime generally. And it is likely that increased restrictions will not be effectively enforced where most needed. The South African Police Service observes that local communities accept high numbers of unlawful liquor outlets.

In addition, the long list of potential inspectors opens the door to corruption: any member as defined in section 1 of the South African Police Service of or above the rank of sergeant; the Commissioner for Customs and Excise or any officer as defined in section 1(1) of the Customs and Excise Act; a traffic officer designated in terms of the National Road Traffic Act; any person designated under section 10 of Foodstuffs, Cosmetics and Disinfectants Act; a peace officer contemplated in section 334 of the Criminal Procedure Act; any person designated as an inspector by the Department of Agriculture

and Fisheries; any person designated as an inspector by the Department of Health; any person designated by the Minister upon request.

 

No evidence that measures proposed will reduce “social-economic impact” of abuse

There is no evidence in support of the view that the proposed recommendations will reduce the costs of alcohol abuse, or the “social-economic impact” of liquor.

Our ghastly apartheid experience with the same measures showed quite the opposite.

Liquor-related medical conditions are not alleviated just because liquor is bought 0.5 km away and before statutory closing time. Such measures cannot be shown to reduce harmful consumption.

South Africa already has comprehensive laws with the stated aim of reducing the socio-economic costs of alcohol abuse. National legislation regulates manufacture and distribution, and provincial laws govern retail supply. There are statutory disqualifications and licence conditions, and requirements for management, premises, hours and delivery. Liquor sold under on-consumption licences must be consumed on the premises. Supply to minors or an intoxicated person is prohibited, as is intoxication in public. Inspectors have wide powers. Regulators have the ability to cancel registration or licensing for contraventions of the laws. There are stringent penalties for contravening any of these laws.

As long as liquor is a lawful and legitimate product, the only effective thing for government to do is to inform and educate the public about risks and to promote and encourage responsible behaviour.



[1] Which was referred to as “kaffir beer”.

[2] Bill para 7.1 & 7.2

[3] Bill para 22

[4] Louw, L. (10 June 2015). “Nothing to toast in proposed liquor laws”. Business Day. Retrieved from http://www.bdlive.co.za/opinion/columnists/2015/06/10/nothing-to-toast-in-proposed-liquor-laws

[5] Bill para 27

[6] Bill para 3

[7] “A Muslim prayer room is located on the Upper Level outside Entrance 27”. Sandton City: Centre information: Facilities and services. http://www.sandtoncity.com/libproperties/content/en/sandton-city/sandton-city-facilities-and-services (Retrieved on 17 June 2015.)

[8] Louw, L. (10 June 2015). “Nothing to toast in proposed liquor laws”. Business Day. (See fn. 4.)

[9] Bill para 6 (b)

[10] Bill para 17, 19 & 25

[11] Bill para 25


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