His Worship, the Mayor of Ethekwini, Cllr James Nxumalo;
Chair of the Economic Development & Tourism Portfolio Committee, Mr Nhlakanipo Ntombela;
All Members of the Legislature Present;
Mayors, Deputy Mayors and Councillors Present;
Members of the Diplomatic Corps Present;
CEOs of Public Entities;
All Public Sector Senior Executives Present – National, Provincial & Local Government;
The private sector at large;
Editors and members of the media;
Distinguished guests;
Ladies and gentlemen
Today is indeed a historic day for all of us; it is really a culmination of years of dialogue and consultation with interested and affected parties, which resulted in the promulgation of the KwaZulu-Natal Liquor Licensing Act (KZNLA), Act 6 of 2010. A new public entity was created on 1 August 2012 and today we are witnessing the birth of this fledging organisation. In the next few minutes the KwaZulu-Natal Liquor Authority logo and brand identity will be revealed by Dr Gcina Mhlophe who has distinguished herself as one of our great cultural artists.
Programme Director, while alcohol contributes to the economy of our country, the reality is that its abuse ravages our families, our communities and the nation. We have heard of many accounts where young children and youth are increasingly falling prey to alcohol and substance abuse. It goes without saying that it is a contributory factor to poverty, crime, reduced productivity, dysfunctional family life, escalation of chronic diseases and therefore it needs to be dealt with holistically and inter-sectorially.
The KZNLA will take the lead in this regard to ensure all stakeholders play a critical role in the control and regulation of alcohol.
However, liquor industry is one of the major contributors to the vibrancy of our economy – providing income to thousands of householders whilst adding significantly to the state tax revenue.
At the height of global recession in 2009, a study by South African Breweries revealed that the South African liquor industry contributed an estimate of 4, 4% to the Gross Domestic Product which is worth approximately R94, 2 billion – while South African Breweries (SAB) alone had a lion’s share of around R66, 2 billion. According to National Treasury, the state scooped R10, billion worth of tax revenue from this sector during the 2009/2010 financial year – which accounted for 1, 7% of the total tax collected by the state during the year under review.
This illustrates the impact the liquor industry has on the country’s economy and indeed the influence it has on our social lives and because of this, it becomes crucial that we put in place legislative and policy mechanisms to ensure that there is responsible trade and consumption of alcohol beverages to prevent unintended consequences that could undermine the positive contributions the sector has on the economy.
The Authority is therefore expected to ensure compliance with the laws designed to bring about constructive and responsible sales of the alcohol products. Its success therefore would in the main hinge on the support received from all sections of our society. Corporation rendered to its predecessor, the KwaZulu-Natal Liquor Board should prevail since the challenges associated with reckless and negligent use of alcohol products will not diminish overnight, but we believe the new approach and additional powers of inspection conferred on the authority would make a difference.
While the operations of the KZNLA are shaped by the content of the KZN Liquor Licensing Act as stated above, but we are also guided by the National Drug Master Plan (NDMP) of South Africa – a four year plan which was formulated by the Central Drug Authority and approved by parliament to meet the requirements of international bodies and at the same time, to meet the specific needs of South African communities.
The Plan sets out the contribution and role that each government department must play in fighting the scourge of alcohol and substance abuse. It recognises the need for a significant contribution to be made by specified departments, all provinces and several other stakeholders in the country. A multi-disciplinary approach is a fundamental prerequisite to ensure the proper regulation and control of liquor in the province.
In the build-up to the Substance Abuse Summit held at this very same venue in March 2011, a door to door rapid participatory assessment was conducted in the province, where 92% of community respondents indicated that alcohol and tobacco are the substances most predominantly used in selected areas.
Ladies and gentlemen, the newly established Liquor Authority will undoubtedly play a critical role in the control and regulation of the retail sale and micro-manufacturing of liquor in KwaZulu-Natal. The Authority in terms of the Act is tasked with providing mechanisms aimed at reducing the adverse socio-economic and other effects of alcohol abuse. The Liquor Act seeks to provide for public participation in the consideration of liquor license applications and its main objective is to promote the development of a responsible and sustainable liquor industry in a manner that will facilitate the entry of new participants, diversify ownership and encourage ethos of social responsibility across our communities.
The KZNLA will, therefore, formulate policies and strategies around partnerships with our stakeholders to ensure that we have a socially responsible liquor industry which is conscious of the wellbeing of the communities within which it operates. The Authority will therefore ensure that while there will be timeous processing of liquor license applications, mechanisms to ensure compliance and enforcement of the Act are indeed in place to strike a balance where the interests of both traders and communities is not compromised.
We are grateful that the industry is part of the initiatives to curb alcohol abuse and there are many campaigns that have been initiated jointly by us as government and the industry to ensure that while there is growth in the sector, vigilance against potential social problems is promoted.
As you would be aware as back as 1989 leading manufacturers, distributors and retailers formed an industry self-regulatory structure, the Industry Association for Responsible Alcohol Use that assist in the promotion and escalation of education programmes to reduce levels of alcohol abuses in our society. Government has reciprocated industry efforts with the introduction of regulations that endeavour amongst other things, to limit exposure of vulnerable categories of our society to liquor products.
Programme Director, underage drinking is one of the challenges that this new entity will have to deal with. At the same time there is an unfortunate situation where many pregnant women ignore health warnings that alcohol consumption could harm their babies through the development of foetal alcohol syndrome. The mushrooming of illegal outlets selling liquor – with no respect for set regulations such as cognisance of the location of the business from designated areas such as schools and places of worship is another worrying factor which makes it difficult to protect vulnerable sections of our communities from the rigors of alcohol.
We are therefore expected to create a culture of activism around this sector where members of the public are aware of their rights and laws relating to the sale and consumption of alcohol beverages which will ensure that they have influence in the process of adjudicating on application on liquor permits. But more importantly, an aware citizenry wouldn’t allow illegal trader to ferment social instability through irresponsible selling of their products to children, pregnant women, infirmed and indeed to the already extensively intoxicated patrons.
One of the key tasks of the new Authority would be to proactively educate different constituencies on the liquor industry regulation in order to be able to assist in identifying illegal trade which could hurt the positive and responsible image expected of the industry.
Once again, the success of the Authority in creating a more sustainable but responsible liquor industry in KwaZulu-Natal will require co-operation from all other stakeholders in the industry, government, communities and civil organisations. We therefore as a collective have to ensure that the activation of the Authority forms part of our overall campaign to economically empower our people, by ensuring that trading in alcohol is within the parameters of the law to guard against potential abuses that could have adverse repercussions.
Meanwhile there numerous positives that could be attributed to the liquor industry that contributes to the socio-economic empowerment of the historically marginalised sections of our society. Besides the creation of employment in various communities, two of the leading liquor organisations, SAB and Brand-House are actively involved in skills development for young people wishing to become entrepreneurs. Since 1995, through its Kick-Start programme, SAB has trained more than 24 thousand young entrepreneurs where they gain basic and advanced capacities to run profitable and sustainable businesses.
Likewise, Brand-House is investing in the development of an entrepreneurial culture amongst young people. The Pitch & Polish initiative is one of the company’s corporate responsibility investments that deserve our appreciation as it contributes in the creation of a pool of individuals that have potential to generate jobs for themselves and others instead of swelling the ranks of the army of unemployed.
In terms of Black Economic Empowerment (BEE) offerings, about two years ago, SAB announced a black economic empowerment stake estimated at R7 billion where 30 thousand black shareholders benefited. This was a significant move that should be emulated by many business organisations, not only in the liquor sector. These are just some of many initiatives undertaken by the industry to ensure that liquor is more than just a hazardous substance, but it could be a vehicle for real socio-economic empowerment when traded responsibly.
There is a view point in spite of the regulations that the state could put in place to enforce harmless drinking of alcohol beverages, it becomes the sole responsibility of an individual to ensure that this substance is not associated with social disorder, crime, violence and death. This implies that as a nation we can build a culture of responsible drinking where alcohol remains one of the essential components of our menus – taken mainly to create a conducive atmosphere for socialisation amongst human beings.
As part of our social responsibility, it is my pleasure to open Sobriety Week, an annual event, launched by the Department of Trade and Industry through the National Liquor Authority, with the aim of increasing awareness amongst learners on the harmful effects of alcohol when consumed wrongly. The main objective of the campaign is to discourage consumption of alcohol by minors and promote the ethos of responsible drinking amongst men and women whilst at the same time encouraging responsible trading. Our campaign will start tomorrow in Newcastle and will conclude on the 14th of September 2012 at Westham Secondary in Phoenix here in Durban.
Ladies and gentlemen I invite you to join us in this journey of combating alcohol abuse and promoting responsible trading. You have a role to play as we are seeking to create a society based on values of respect and dignity.
I thank you.
