Favorable conditions for Big Alcohol in South Africa

There are three main ingredients that make the South African alcohol industry to thrive, namely:

  1. Cheaply priced beer,
  2. Readily available and unregulated alcohol trading, and
  3. Largely unregulated alcohol marketing.

These three main ingredients combined with access to the political elite through business links and strategic Corporate Social Responsibility partnerships with government and civil society provides the alcohol industry with social currency to continue aggressive marketing, supplying the largely unregulated market and lobbying to avoid any regulation.

South Africa: Turf War Between Beer Giants

Alcohol taxation in South Africa

On February 26, 2020, the Minister of Finance announced an annual tax increase on alcohol products. In real terms, the proposed annual tax increase percentage translates into a mere 8 cents (in today’s exchange rate this equals not even 1 US cent) increase on 330ml beer products. This increase has not resulted in a significant change in the real price and affordability of alcohol in South Africa. Beer in South Africa is amongst the cheapest in the world – a Deutsche Bank study in 2018 rated Cape Town and Johannesburg amongst the top 5 cities from 50 cities across the world in terms of cheap beer – a can of beer being even cheaper than a loaf of bread.

Unlike countries like Thailand, Scotland and Russia, South Africa has yet to understand the power of alcohol taxation for public health. On the whole, taxation is used for generating revenue which is ploughed back into the general fiscus. No allocation is made for alcohol prevention despite the fact that an estimated R246 and R280 billion is annually spent on tangible and intangible alcohol-attributable harm. Alcohol harm is epidemic in South Africa:

The Southern African Alcohol Policy Alliance South Africa (SAAPA SA) shares the view with many other advocates that taxation is an important tool to reduce consumption and – like Thailand does – could be used to generate resources for prevention if directed to an independent health promotion fund.

The option of Minimum Unit Pricing (MUP) is increasingly showing benefits for reducing consumption of heavy alcohol users. Although lifetime abstainers in South Africa are recorded at 53.5%, the International Alcohol Control study ranked South Africa the highest out of six countries for quantity of alcohol consumed in a typical drinking occasion (237 ethanol mL; 54% of respondents), and second highest for total consumption over a period of six months (10.3L).

South Africa: High-Risk Alcohol Use Common

The study also showed that South Africa also scored highest (37% compared to 14-19% of middle-income countries and 19-27% of higher income countries) for higher risk alcohol consumption (six or more alcoholic drinks at least once per week).

The WHO reports heavy episodic alcohol use amongst 15-19 year-old alcohol users at 65.4%. However, the IAC study suggests that the 20+ age groups, men in particular, are even more at risk for heavy alcohol consumption.

Affordability and pricing of alcohol, however, needs to at minimum be supplemented by the two other WHO alcohol policy ‘best buys’ – restricted marketing and reduced availability.

International evidence about marketing impact on youth consumption is well documented. It encourages early initiation and influences the amounts of alcohol consumed by young people in particular. Marketing of a group 1 carcinogen violates the right of children to health and to be protected from harm – an obligation for South Africa as a signatory of the UN Convention on Rights of the Child.

Development for all or lucrative market for Big Alcohol?

South Africa, like other African countries, has a weakly regulated, lucrative and “emerging” market for Big Alcohol.

  • 28% of the population is under 15 years old, media-savvy and ready to be groomed;
  • 7% is between 15 and 24 years, mainly influenced by peers and media; developmentally carving their independence and have started earning money;
  • South Africa has a rising middle class with disposable income. And a plethora of young middle-class professionals and icons like Trevor Noah (a famous comedian with his own daily late night TV show in the US), Lyra (a jazz musician who has a Barbie Doll named after her), Bonang Mathebe (who has her own brand of ‘bubblies’ and voted amongst the top Forbes top 50 women in Africa in 2020) and Chad le Chlos (Olympic swimmer) ready to lend their brand power to promoting alcohol as an aspirational ‘hip and happening’ lifestyle product.

The South African government have also signalled their support for self-regulation by endorsing a ‘new’ code as recently as January 2020, whilst at the same time withholding for 7 years the Draft Control of Marketing of Alcoholic Beverages Bill of 2013 from the public for comments despite its inclusion in its report submitted to the UN Committee on Economic, Social and Cultural Rights in 2015 and thus violating South African’s hard fought democratic right to consultation and participation.

Wide and easy alcohol availability

The other critical issue is the less spoken of unregulated trading in residential areas in South Africa. A ‘hangover’ from apartheid days, where alcohol trade was allowed in ‘townships’ as part of the strategy by the government to weaken resistance, alcohol trade is now ‘marketed’ as a means to Black Economic Empowerment.

For example, in a township like Khayelitsha outside of Cape Town, this translates into 1024 outlets, of which only 11% are legal and residents are within 3 to 5 minutes walking distance of any alcohol outlet.

Alcohol control saves lives, improves health, strengthens economy

South Africa has three draft Bills that will increase the regulation of alcohol trade, marketing, and availability:

  • Draft Control of Marketing of Alcoholic Beverages Bill of 2013,
  • Draft Traffic Amendment Bill of 2015 (providing for reduced BAC limit),
  • Draft Liquor Amendment Bill of 2017 (providing for increased age to 21 years; 100m radius limitation of trade around educational and religious institutions; banning of social and small media; a liability clause).

A commissioned study by NEDLAC, the economic chamber of government by Genesis Analytics in 2017 confirmed the public health arguments for better alcohol legislation. Stronger alcohol control would be beneficial for the overall health of the population. The report provides strong and clearly-reasoned evidence that adoption of the proposed national Liquor Amendment Bill of 2017, with specific reference to the provisions related to restricting advertising, increasing the legal alcohol consumption age to 21 years, changing licensing requirements and extending liability to manufacturers, depending on Low versus High impact, will result in:

    1. A decline in tax revenue of between R 0.3b and R 1.1b,
    2. A saving in government spending of between R 0.7b and R 1.9b (including savings on government spending on public health of between R 0.3b and R 0.73b), and
    3. At least 185 lives would be saved a year as a result of a projected 3% reduction in alcohol-related road traffic fatalities, as well as a reduction in HIV transmission, crime, violence, and gender-based violence.

A question, therefore, is why the South African government has not acted until now?

The recent COVID-19 lockdown restriction of alcohol trade is showing positive impact and was reported by the police has having contributed to reduced murder, rape, and assault. Anecdotal evidence suggests reduced hospital emergency admissions, ‘freeing’ resources of a fragile health system to respond to the crisis.

Post COVID-19 South Africa will be an interesting case with three ingredients for preventing and reducing alcohol attributable harm – existing evidence-based draft legislation; immediacy of experience in regulating for public health and evidence of positive impact of regulating availability. The question of whether political leadership will step up and act in the face of the alcohol burden still remains to be seen.

For further reading from the blog:

The Story Behind Soaring Alcohol Harm In South Africa

Alcohol-Related Domestic Violence In South Africa

For further reading from the news feed:

South Africa: Alcohol Fueled Violence Against Women Epidemic

South Africa: Alcohol Fuels HIV/ AIDS In Women