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Opinionista

Justifications for South Africa’s draft liquor bill are hard to swallow

Michael Fridjhon is South Africa's most highly regarded international wine judge, the country's most widely consulted liquor industry authority, and one of South Africa's leading wine writers. Chairman of the Old Mutual Trophy Wine Show since its inception, he has judged in countless wine competitions around the world. Visiting Professor of Wine Business at the University of Cape Town, he has been an advisor to the Minister of Agriculture and is a recipient of the French Chevalier de l'Ordre du Mérite Agricole. Worldwide winner of the Louis Roederer International Wine Columnist of the Year award in 2012, he is the author, co-author or contributor to over 30 books and is a regular contributor to wine publications in the UK, France, Germany and China. He is the founder of winewizard.co.za , a site which specialises in scoring South Affrican wine and guiding consumers to excellent value for money and quality.

South Africa’s draft liquor bill seeks to impose maximum discomfort on the liquor industry seemingly on the grounds that since liquor is evil, any attack on its producers and distributors is morally justifiable. Few, if any, of the proposals are practical. If producers and distributors of alcohol can be held liable for the abuse of their product, then the agricultural sector must answer for the chronically obese and petrol companies for the damage caused by Molotov cocktails.

I had lunch a few weeks back with the marketing director of a fine wine and spirits business. He had just come from a meeting with a “facilitator” who was pitching to provide access to one of the more elusive (and commensurately more desirable) segments of the market, the so-called “black diamonds” (also known by various more or less complimentary monikers ranging from “newly empowered” and “newly enricheds” to “robber barons” and “plunderers” – take your pick.) Anyone who visits the now almost completed Diamond Walk at Sandton City will know why this clientele is regarded by the deluxe goods trade as the ultimate apple on the tree of life.

As my lunch guest explained to me, there are countless intermediaries offering to connect those with unimaginable wealth to those with over-priced goods and services to sell. This is not a uniquely South African circumstance – given the territory. “If you are in the business of supplying something which is so rare that it cannot easily be found in even the most upmarket retail environment, you spend half your time making it inaccessible, and the other half finding the buyers who have made themselves invisible,” he explained.

He also observed that everyone who offers to connect him to this particular commercial El Dorado requires a generous allocation of free product. “There can be no other segment of the luxury goods market where there is an automatic expectation of freebies,” he said with more irritation than resignation. Anyone in the wine industry will confirm the truth of this assertion. Retailers are constantly importuned by donation collectors seeking wines and spirits to supply lubrication for good causes. Wholesalers and distributors are tracked down with the same purpose in mind, even though their licences prohibit them from dealing directly with the public. Wineries get similar appeals on an almost daily basis – not only from charities and welfare organisations who might be seeking a justifiable handout, but from fully fledged commercial operations like Secret Eats who think their client base is so valuable that producers should be falling over themselves to give away stock simply to ensure it gets sampled by the “right crowd”. Art galleries used to be amongst the worst offenders, but I only realised the extent to which this has changed because out of the blue a very high profile (and potentially very profitable show) was on the bum the other day for smart wine for an opening.

I’m not in the deluxe watch or leather goods sector, so perhaps the observation (that it’s only the liquor trade which is expected to provide free handouts) is incorrect. Perhaps the same tungsten-skinned pan-handlers drop into Prada and Mont Blanc on a daily basis. Certainly, there must be an element of this because occasionally you see a raffle prize list which includes a Meisterstück pen – or even a luxury sports car (and you’re forced to assume that the organisers never paid full price for the trophy).

Despite its willingness to bleed liquor producers for free stock, society is equally keen to punish them. There is no doubt that the term “sin tax” reflects the prissiness of the Anglo-Saxon exchequer. It probably also signals open season when it comes to begging for handouts. It occurred to me that there is a connection between the demand for freebies and the moral excoriation of the liquor trade. Because liquor – to the puritan mind – smacks of pleasure, it must be illicit in some way. If this is so, then the industry as a whole must be made to pay for offering us the opportunity to enjoy ourselves.

This might help to explain the draft liquor bill – published in May and offered for comment until mid-August – that comes to us courtesy of unashamedly Stalinist Trade and Industry Minister Rob Davies. There’s something indisputable puritanical about communism (the moral disapproval of excess, the high-ground of deprivation). You can tell that the minister would prefer that the idea of indulgence be removed from the conceptual lexicon – at least until everyone can indulge equally), so he’s happy to be cast in the role of killjoy – and to turn his department into a kind of vice squad. Its campaign against the liquor industry is not directed at substance abuse: there are enough laws in place to deal with that. There isn’t the competence or the political will. What Davies and Co would really like to see is full-on prohibition, failing which imposing maximum discomfort on the sector offers a reasonable second best. It’s probable that in an honest moment, those responsible for the draft liquor bill might actually acknowledge this – though they would argue that since liquor is evil, any attack on its producers and distributors is morally justifiable.

Certainly the clauses which litter the so-called discussion document are laced with a sense of moral propriety. Instead of seeing the issues the bill tries to address as a failure of policing, the Department of Trade and Industry hopes more horse-hair and flagellation will address the problems. It wants the drinking age raised to 21, it wants licences only for premises at least 500m away from schools, places of worship, recreation, rehabilitation centres and transport hubs. It aims to enforce broad-based black economic empowerment (BBBEE) compliance for existing licences and new applications (implying a redemptive connection between the sin of supplying alcohol and the virtue of sharing the profits with the previously disadvantaged).

Few, if any, of the proposals are practical. If producers and distributors of alcohol can be held liable for the abuse of their product, then the agricultural sector must answer for the chronically obese and petrol companies for the damage caused by Molotov cocktails.

The BBBEE clause, which comes with a threat to revoke existing licences, is an undisguised land grab. The Constitutional Court recently ruled that a liquor licence constitutes property under section 25 of the Constitution. Depriving a successful trader of the fruits of his labour is exactly the kind of strategy that will do wonders for foreign investment in South Africa.

The 500m rule is plainly ridiculous: it’s difficult to imagine anywhere in Johannesburg or Sandton (outside an industrial area) which is at least 500m away from schools, places of worship or recreation, residential areas or a public transport link. Norman Goodfellows is near the Wanderers Club, the OR Tambo Duty Free is in the midst of a transport hub, the Hyatt hotel is next to the Gautrain station. If the bill becomes law and the two-year phasing-in period is rigorously applied, you’d have to go to the kind of illegal shebeen the Act hopes to see eliminated just to buy a bottle of beer.

We think we inhabit a secular state, where the rights of one group should not be allowed to over-rule the rights of others. People who live in close proximity to a church or place of worship are expected to tolerate the noise, disruption, and the comings and goings of the congregants – especially on weekends. There is no reciprocal tolerance when it comes to pubs and sports clubs. Religious services disrupt neighbourhoods (often at the strangest hours) – so do bars and restaurants. If you don’t like it (the pub or the church) don’t buy property in the neighbourhood. When it comes to new licences, it’s not an unreasonable expectation to seek the consent of those whose immediate environment may be affected (by a church or a liquor outlet). Present legislation provides for this when it comes to new licence applications, though not, as far as I know, when it comes to siting new churches, mosques and synagogues. In fact, the draft law intends outlawing established – and legally licensed – businesses.

Davies may be doctrinaire, but he’s not stupid. He must know that, if enacted, most of what he is proposing would be struck down by the courts. He doesn’t mind wasting the state’s resources (not to mention those of the private sector) going through the motions so he can show his prohibitionist constituency that he has its interests at heart. No doubt this is also what underlies the proposal to raise the minimum legal drinking age to 21. Even granny-nanny Australia has come to see the impracticality of this threshold and has progressively lowered the drinking age to 18 in all states. We know that an uncomfortably high number of under-18s are already obtaining liquor. Raising the drinking age to 21 will simply force more of them to buy (and binge-drink) liquor illegally. Alternatively it will drive them towards suppliers of potentially more dangerous mind-altering substances.

This is in fact the most likely outcome of the Department of Trade and Industry’s proposals should they become law. People who use alcohol for its effect will have to shift their patronage to potentially more harmful products. Given the state’s inability to police the burgeoning illicit drug business, creating an environment where this trade would be the primary beneficiary of department policy is either brilliantly devious or simply unimaginably stupid. Perhaps there’s a theory that, without recourse to legal supplies, the customers will lead the authorities to the many bootleggers already supplying the illicit sector. South African Revenue Service excise staff estimate that hundreds of millions of litres of “ale” (produced by fermenting yeast and sugar) are already traded outside the tax net. With the statutory environment in the hands of the Department of Trade and Industry mavens, literally billions of rands of excise, duty and value-added tax income would evaporate.

Central to the department’s position is regulation: it sees liquor as a dangerous substance, the sale and distribution of which requires fierce controls. This is hardly surprising, given the dirigiste thinking which characterises most of its legislation. If you can latch onto the head of the hydra, so the logic goes, you can control the beast – notwithstanding the evidence which shows it will sprout another head. It’s a view which flies in the face of the recommendations of the Global Commission on Drug Policy, the panel of 22 world leaders and intellectuals (which included Kofi Annan, Paul Volcker and Richard Branson) which advocated the decriminalisation of drug use.

South Africa already has ample legislation in place to deal with substance abuse. There are sanctions against drink-driving, domestic violence, riotous behaviour in public – more legislation won’t change this. You don’t blame manufacturers of police vehicles when rogue cops handcuff a suspect to the back bumper of a squad car and drag him along the road until he succumbs to his injuries. However, when you feel empowered by moral fervour, you do not act rationally – but rather with all the force of an avenging angel. Davies and his henchmen are the Ultimate Vice Squad, and in pursuit of their utopia, any and all means are justified. In this they share with the handouts-and-freebies brigade the view that those who produce and sell alcoholic beverages are tainted with sin and not really entitled to the fruit of their labours. Like the sleezy cops who lurk along Oxford Road preying on the sex workers who ply their trade in the shadows cast by the dim street lights, they have a “deal” for the country’s liquor industry and it reads something like this:

You have no rights. You have no status. You’re just another underclass.” DM

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