More news than you can shake a stick at
22 November 2017 01:10 (South Africa)
Opinionista Ivo Vegter

Save the rare wine and endangered craft beer

  • Ivo Vegter
    IvoVegterBW
    Ivo Vegter

    Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets. He is seldom wrong.

Moralistic busybodies can all rattle off reasons why alcohol is bad. They’d ban it, if they hadn’t learnt the hard way that prohibition turned out to be counter-productive. So they go after alcohol advertising instead. It may or may not help some people, but it certainly can only do so at the expense of others – and especially of small businesses.

Minister Aaron Motsoaledi is unapologetic. He wants to deny adult South Africans their personal freedom, and treat them as children. He sees himself as a father-figure, responsible for our behaviour.

“Why do kids need nannies? Because there are certain things which they can’t do for themselves – they need someone to take care of them,” Motsoaledi told eNews Channel Africa recently. “We are playing that role.”

Among his alarming parenting plans is to prohibit alcohol advertising. Because if people don’t see advertising, they won’t buy alcohol, goes the theory. After all, they’re children, so they’re thick as planks. And nobody buys tik, do they? QED.

Frédéric Bastiat, a French economist, observed in a seminal 1850 essay, That which is seen and that which is not seen, that one must evaluate an economic policy choice not only by the immediate effects it might have, but by its unseen impact.

So, assuming, for the moment, that a ban on alcohol advertising will reduce alcohol abuse, what are the unseen effects? At whose expense will Nanny Motsoaledi yank drunks onto the straight and narrow?

At the expense of the media industry, as independent marketing analyst Chris Moerdyk explains. At the expense of the development of sports, arts and culture, all of which depend on generous sponsorships from alcohol manufacturers. But most importantly, he’ll do so at the expense of thousands of employees of small wine farms, breweries and bars.

I wonder how he’ll explain to a mother who loses the ability to provide for her family because her employer – a newspaper, a winery or a restaurant – went out of business, that she should suck it up because somewhere, somehow, there’s an alcoholic wifebeater who will stop being delinquent. I wonder how he’ll explain that this redistribution of misfortune from the guilty to the innocent isn’t a reason to grab the nearest ethanol concoction and drown her sorrows.

Motsoaledi told Business Day that it’s okay for him to be a nanny because some other countries do it too. Even the World Health Organisation is at it, with reams of moralising exhortations such as the Global Strategy on Diet, Physical Activity and Health.

Besides being an egregious example of the tu quoque fallacy, it raises the alarming spectre that once Motsoaledi has dealt with smoking, drinking, salty snacks and fast food, he’ll propose mandatory gym attendance for anyone who is a member of the equally mandatory National Health Insurance scheme. Your ass belongs to Nanny Motsoaledi, kid!

The argument is that because government foots the bill for some healthcare, it is entitled to dictate how people live in order to reduce their burden on the state. That is an excellent argument, but not for dictating how people live. It is an excellent argument why a welfare state is fundamentally incompatible with the individual freedom that is guaranteed in our Constitution.

Of course, anyone can give reasons why alcohol is evil. In moderation, it isn’t harmful, and it can even be beneficial, but let’s not let such niceties derail our patriarchal rhetoric. It is also entirely legal, but no self-respecting nanny would be brought up short by such pedantic protestation. The point: alcohol is sometimes consumed in excess by some people, and this can cause dependency and health problems, contribute to accidental deaths, especially on our roads, and exacerbate violence, especially in our homes.

Consequently, the state carries a burden because of alcohol abuse, and any policy intended to shift that burden is a good policy. Whether it succeeds or not.

The problem is this. A ban on alcohol advertising, if it does reduce the burden on the state, will shift the burden not onto the abusers of alcohol, which might be just, but onto innocent non-abusing people and their dependants.

Craft breweries and the charming little wine farms that contribute so much to South Africa’s attraction as a tourist destination will suffer. Some will go under, or be absorbed into the industrial monopolists. Advertising is the only financially viable means for such small businesses to attract customers. Fewer visitors who seek out our splendid wineries will have a knock-on effect on others in the tourism trade.

Many bars and restaurants rely for a significant part of their day-to-day expenses on merchandising supplied by liquor companies. Having to buy their own fridges, taps, umbrellas and signage will raise costs for many, which will inevitably put some out of business.

According to Econometrix, in a study commissioned by the Industry Association for Responsible Alcohol Use, the advertising ban will cost 12,000 jobs. Not to mention the loss of R7.4 billion in GDP, R1.7 billion in tax revenue, and half a billion in imports and exports. These numbers are likely a significant under-estimate.

According to a 2005 study of the alcoholic beverage industry produced by the Department of Trade and Industry (DTI), the highly regulated environment of the 1970s and 1980s produced a top-heavy industry dominated by a small number of firms – notably SABMiller and United National Breweries (formerly National Sorghum Breweries), Distell (30% owned by SABMiller) and Brandhouse.

These bigger, badder companies are not as vulnerable to an advertising ban as their smaller rivals, so they’re probably happy to return to the over-regulated policies we thought were buried with Apartheid.

The dominant players can afford direct marketing strategies, such as massive sponsored binge-drinking parties where young people are fed on a diet of sterile pop music, glaring strobe lights, cheap beer served in plastic cups, and fashionable shooters served by scantily-clad girls. The party lasts until you vomit, run out of money, or both. But don’t worry, once you’ve recovered from your hangover, there’ll be another one, and you know you just have to be there. After all, you’ll never know that they don’t serve beers you never knew existed.

In an interview with SAPA, social development minister Bathabile Dlamini says: “The harmful use of alcohol has significant negative impacts on individuals, families, communities, the economy and the country as a whole.”

Nobody will dispute that, although alcohol also has significant positive impacts on individuals, families, communities, the economy and the country as a whole.

She said it was the state's responsibility to protect the health and well-being of South Africans, which is a rather more dubious claim, at best.

She added that research indicated that alcohol advertising influenced behaviour negatively. And that, I fear, is not true at all.

Not because no research that indicates this exists, though some published papers merely cite it alongside unspecified “WHO strategy documents”. It is false because other research shows that there is no such link, and argues that studies that do are flawed. There is even some research that shows alcohol advertising bans are associated with increased consumption.

Similarly, studies on tobacco advertising bans find they had no influence on cigarette demand. In fact, a decline in demand often created the political atmosphere that made advertising bans possible, which suggests reverse causation.

Because of this lack of evidence, Canada, Denmark, New Zealand and Finland have recently rescinded alcohol advertising bans. Because of this evidence, Dlamini asserts, South Africa drafted its bill banning alcohol advertising. Care to explain the contradiction, Nanny Motsoaledi?

Dlamini also claims that alcohol abuse costs the government R38 billion, with intangible costs of up to R240 billion. She got these numbers from perhaps the most comprehensive study on the South African liquor industry, the 350-page 2011 study by DNA Economics, commissioned by the DTI. It points out that the available research on the costs of harmful alcohol use has significant limitations, and it is therefore very hard to estimate such costs for South Africa.

That didn’t stop Dlamini. She didn’t point out that those tidy little numbers hide some 30 pages of complex assumptions, literature review, and estimates. For example, the tangible cost to the government in that study includes such tenuous items as the increase to the disease burden as a consequence of alcohol-related crime. About a quarter is accounted for by damage to motor vehicles in accidents, and another 10% of it constitutes private expenditure on home and business security. Suddenly, the government’s share of this burden is starting to look less hefty.

Likewise, the bulk of that huge “intangible” cost actually involves lost years of life, based on a statistical estimate of what a lost life is worth. This is a particularly vague concept, because the value of a life is rather hard to neatly encapsulate as a bookkeeping entry (it’s R3.5 million, in case you wondered how much Dlamini thinks you’re worth). In a country with high unemployment, where not everyone is productive, can the lost productivity of drinkers, because of their own actions, really be counted as harm to everyone else?

Behind the glib numbers hides a more banal truth: there is an uncertain but probably significant cost to alcohol abuse, which gives the government an excuse to intervene in the market. An alcohol advertising ban, if it makes any difference to this at all, won’t do much to reduce that cost. And certainly not by more than R18 billion, which is the (equally vague) value that the DNA Economics study says alcohol buyers place on their pleasure, over and above the R48 billion they spend on alcohol.

But Motsoaledi can’t be bothered with the difficult job of alcohol abuse prevention programmes targeted at people or populations that actually abuse alcohol, which research shows are very promising. So he’d rather look busy playing nanny, making our lives miserable with an intervention that probably will not work, and will definitely cost thousands of innocent bystanders their jobs, which is not justifiable even if nobody ever got drunk again.

Despite this preposterous situation, Motsoaledi and Dlamini are on firm rhetorical ground. After all, they can dismiss resistance to their draconian laws as the greedy spin of liquor companies, or the selfish denialism of drinkers who don’t care about the street crimes, drunk driving and broken homes.

Such allegations, however, would be false, unlike the charge that Motsoaledi and Dlamini are moralising busybodies who ignore both available evidence and basic arithmetic in their efforts to treat South Africans like children.

Pity that it is not the big guys, who might have the legal and research clout to fight back, who will bear the brunt of all this misguided nanny-statism. The blow will be heaviest for small wine farms, craft breweries, neighbourhood bars, and shebeens, along with their staff and families. They will be crushed underfoot by Nanny Motsoaledi, who only meant to save the drunks. DM

  • Ivo Vegter
    IvoVegterBW
    Ivo Vegter

    Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets. He is seldom wrong.

Get overnight news and latest Daily Maverick articles






Do Not Miss