Alcohol industry used “regulatory capture” to delay liquor bill, say researchers
Liquor Amendment Bill still not introduced to Parliament after nine years
A new study argues that the alcohol industry has used its representation on the National Economic Development and Labour Council to delay the Liquor Amendment Bill. Archive photo: Ashraf Hendricks
- A new study argues that the alcohol industry has used its representation on the National Economic Development and Labour Council (NEDLAC) to delay the Liquor Amendment Bill.
- The bill was published by the Department of Trade and Industry for public comment in 2016 but has never been introduced to Parliament.
- The industry funded two socio-economic assessments of the bill when one had already been completed by the government.
- NEDLAC denied that there was “regulatory capture”.
Researchers say that the alcohol industry delayed much-needed liquor regulations through its representation in the National Economic Development Labour Council (NEDLAC).
A study published in Globalization and Health argues that the alcohol industry engaged in “regulatory capture” through its representation on NEDLAC committees, including paying for two socio-economic impact assessments of the Liquor Amendment Bill, despite such an assessment already having been conducted by the government.
The Liquor Amendment Bill was published by the Department of Trade and Industry for public comment in 2016. The bill would have restricted alcohol advertising, raised the legal drinking age to 21, and prohibited the sale of liquor in residential areas, near schools and places of worship.
The bill has not yet been introduced to Parliament to go through the legislative process.
South Africa’s per capita alcohol consumption is among the highest in the world, with binge drinking highly prevalent, especially among 15 to 19-year-olds. An estimated 62,000 adults died of alcohol-attributable causes in 2015. During the covid lockdown, bans on alcohol sales reduced deaths from alcohol and trauma admissions at hospitals, highlighting the health impact of alcohol (although the alcohol industry disputes that trauma admissions dropped due to the alcohol bans).
Researchers from the University of Stirling, University of the Witwatersrand and the Southern African Alcohol Policy Alliance (SAAPA), analysed written records of engagements between the liquor industry and NEDLAC between 2017 and 2021. The documents were obtained from NEDLAC through a public access to information request.
The study found that 14 alcohol industry organisations, including Heineken (formerly Distell) and South African Breweries (a subsidiary of AB InBev, the largest beer producer in the world), were involved in bill-related activity at NEDLAC. It identified low community representation in the committees. In one instance, industry representatives outnumbered community representatives by 15 to one.
In August 2017, NEDLAC appointed Genesis Analytics to conduct a socio-economic impact assessment, despite one already having been conducted by the government. The alcohol industry had argued that the government’s assessment did not calculate potential job losses caused by the bill.
The new assessment was funded by the alcohol industry. It delayed NEDLAC’s deliberations on the bill by at least a month, according to the study in Globalization and Health.
The Genesis Analytics assessment found that the World Health Organization’s guidelines on liquor regulation should be “adapted to South Africa” when it comes to restricting marketing, increasing the legal drinking age, or applying zoning restrictions on alcohol-licensed premises.
In NEDLAC’s final report on the bill, from November 2017, industry representatives objected to most of the proposed regulations. The report contains no submissions from community representatives. Industry wanted the legal drinking age to remain at 18, saying it would ensure advertising would not cater to people under the age of 18. It also disagreed with the proposed restrictions on advertising alcohol on billboards, SMSs, the internet, social media, pamphlets, radio, television, or in and around theatres.
Industry disagreed that alcohol should only be sold in areas zoned for the purpose by local authorities, arguing: “One of the legacies of apartheid was that townships have not been zoned for trading purposes which will make it practically impossible for the applicant in the township to obtain a license.”
The industry advocated for a self-regulation approach to alcohol advertising. But the study in Globalization and Health says this is ineffective and against international best practices.
A second socio-economic impact assessment in 2022, also funded by the industry and conducted by Genesis Analytics, was even more critical of the bill’s provisions, even though it had many of the same authors as the first report.
According to the study in Globalization and Health, this second report used “a heavily criticised, industry-funded analysis” commissioned by South African Breweries from Oxford Economics (no relation to Oxford University). The Oxford Economics analysis claims the alcohol industry has a net positive impact on society.
The second Genesis Analytics assessment based its calculation of the number of lives the bill would save “on a reduction in road traffic incidents only rather than the much broader range of alcohol harms,” the Globalization and Health study says.
Genesis Analytics listed Aware, which the Globalization and Health study describes as “an alcohol industry-funded ‘social aspects and public relations organisation’”, as a civil society actor instead of an industry roleplayer.
Industry Responds
GroundUp sent questions to the South African Liquor Brand Owners Association (SALBA) and the Beer Association of South Africa (BASA), which represents Heineken, South African Breweries and the Craft Beer Association of South Africa.
Instead of answering our detailed questions, BASA issued a statement on behalf of its members: “BASA acknowledges the harmful effects of alcohol misuse, including binge drinking, and remains steadfast in its commitment to promoting responsible consumption.”
“At the same time, it is crucial to recognise the positive contributions of the beer industry. A newly updated study by Oxford Economics underscores the beer sector’s significant role in the South African economy. In 2023 alone, the industry contributed R96.46-billion to GDP, generated R71.86-billion in tax revenue, and supported 210,000 jobs, as highlighted in the latest Beer’s Global Economic Footprint report.”
“These findings reaffirm the beer industry’s position as a key economic driver, sustaining businesses, communities, and livelihoods across South Africa.”
NEDLAC responds
NEDLAC told GroundUp that “there was no regulatory capture”.
“NEDLAC in its nature, provides a platform for social partners to seek to cooperate, through problem-solving and negotiation, on economic, labour and development issues, and related challenges facing the country. During engagements on the bill, each of the constituencies has an opportunity to provide inputs on their perspectives, regarding the proposed provisions of the bill.”
Asked about low community representation and the absence of civil society bodies, such as SAAPA, on the task teams, NEDLAC replied: “Community has full participation in the Development Chamber and Manco Task Teams. Representatives of Community Constituency in the relevant task teams are appointed through the Community Overall Convenor (i.e. the leader of the Community Constituency at NEDLAC).”
The Department of Trade and Industry did not respond to our questions.
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