Regulation of liquor trade in the province is of pivotal importance to the economic department and the Gauteng province. As part of strategic rigorous measures to address the challenges in liquor, the department has embarked on a variety of measures to regulate liquor trade. Among the measures introduced, was the pronouncement of a moratorium on certain types of licence applications.
The moratorium was intended to afford us sufficient time to regularise our internal affairs more particularly in relation to addressing the back log. The moratorium has been lifted and the board is ready to deal with new applications. For record purposes, we have already received a variety of new applications as of 2 March 2012. During the moratorium the following were areas that the Board sought to address:
- Curb fraudulent issuing of licences.
- Afford the board sufficient time to deal with backlog of applications in the system.
- Introduce IT and business systems in order to improve the turnaround time on new applications.
- Curb proliferation of liquor trading outlets throughout the province and improve the administration processes.
With regards to the curbing of fraudulent issuing of liquor licences, to date, the Board has introduced various measures to curb fraudulent issuing of licences. Processes are now streamlined, and the issuing of licences has now been centralised to the Chairperson of the Gauteng Liquor Board and the Secretariat, and no officials are allowed to issue licences at any given point in time.
The Board has made significant strides on the issue of reduction of backlog. I am pleased to announce that the backlog of applications dating back to 2006 has to date been eliminated.
We are concerned about the adverse consequences of monopoly in the Liquor Trade, especially in traditional townships. To this end, the Board has identified approximately 80 files which relate to monopoly in Liquor Trade. Discussions have already commenced between the Board and the Competition Commission with the view of addressing monopoly tendencies in Liquor Trade. This largely relates to liquor licence applications of major retailers i.e. Woolworths, Checkers, Pick n Pay, Spar, Massmart and Liquor City. A framework agreement will soon be entered into between the two respective regulatory bodies.
We have also noted with concern, the unethical business practices by some of the large retailers with regards to fronting. These large retailers obtain liquor licences on the pretext of collaborating with previously disadvantaged persons for the advancement of black economic empowerment.
As you are well aware, the current Gauteng Liquor Act of 2003 will be repealed and replaced by the new Gauteng Liquor Act. Consideration will be given to transitional arrangements in relation to any application which will be outstanding on the coming into effect of the new Act. These transitional arrangements will ensure that there is a harmonious transition from the current Act into the new Act.
In relation to the Liquor Bill which amends the 2003 Act, a notice was published for public comments which closed on 29 February 2012.
We envisaged that the new legislation will come into operation towards the end of the second quarter of 2012/2013 Financial Year. The Bill envisages drastic changes to the laws governing the sale of alcohol in the province. In terms of the new legislation:
- Every licence must be renewed annually within twelve months from date of issue
- The Board must consider issues of compliance with the licence conditions and the Act when renewing any licence.
- The Board may refuse to renew any licence
- Licences issued prior to the new Act will be renewed subject to the conditions of the new legislation
- Compliance with the Broad Based Black Economic Empowerment Act.
We wish to emphasise that there will not be an automatic renewal of licences as is currently the practice. The new Legislation is going to be rigorous in its application. All licences will have to comply with the requirements of the Act before they can be renewed.
The issue of traders operating with Shebeen permits has been an area of concern for the Department. Shebeeners currently fall outside the ambit of the existing legislation. It is critical that as Liquor Traders, they must comply with the spirit and latter of the current legislation. The Shebeen permits are due to expire at the end of 30 June 2012. I will announce by way of regulation on the first of July 2012, the migration of the shebeeners into the new regime. To this end, the shebeeners will have a minimum period of three months commencing on the 1st of July to migrate into the current Legislation by applying for any type of licence they deem appropriate for their business.
We have also initiated the Liquor Licensing Modernisation and Business Re-engineering Project, in order to deal with the backlog of applications; long turnaround times; lack of sound database of active licences; duplications of licences; and lack of recording of applications, approvals and rejections.
We have also strengthened our inspectorate capacity in our fight against illegal liquor trade in the province. Since October 2011 to date, we have shut down a total of 126 illegal liquor outlets and seized liquor estimated at the value of just under a million rand. The areas we have covered include Katlehong, Vosloorus, Tokoza, Soweto, Kagiso, Yeoville, Sunnyside in Pretoria and Tembisa where over 50 outlets were shut down. We will continue to conduct these operations rigorously to promote responsible liquor trade.
It is the responsibility of the traders to ensure their patrons behave in a way that does not take away the rights of the ordinary citizens who reside in and around their outlets. It is our view that such things as used condoms, broken bottles and road access obstruction must come to an end.
The Department has partnered with the South African Liquor Traders Association (SALTA) and a Memorandum of Understanding has since been signed. The core of this partnership is work together with the industry to address the problems facing the liquor trade and to implement transformative programmes together including the establishment of entertainment hubs to be operated by liquor trade cooperatives. Besides working together with SALTA on responsible liquor trade, our partnership will also prioritise the transformation agenda.
Our efforts to root out corruption within the liquor regulation system have yielded positive results. The forensic audit work we have done in the liquor licensing has resulted in the department taking stern disciplinary action against a number of officials in the liquor unit that were implicated in fraudulent issuing of liquor licences, abusing the occasional permit system in regional offices and collusion with unscrupulous elements in the industry to undermine the liquor licensing rules for their own financial gain. A total of five liquor licensing officials have been charged and suspended, an additional four officials have been charged but not suspended.
The forensic work has also assisted us to identify areas of functional weakness in terms of the control environment in the liquor licensing system. These have now been addressed as part of the re-engineering work and the automation of the liquor application system. Typically, these areas include issuing of reference numbers, Board secretariat, signing off liquor licences, renewals and occasional permit applications.
Lastly I wish to thank all the industry players for their co-operation while we continue to improve the services.
Enquiries:
Mandla Sidu
Cell: 082 773 9013
Siphiwe Hlope
Cell: 082 411 9229
