Media statement by the MEC for Economic Development, Qedani Mahlangu on the progress made since the announcement of moratorium on issuing of liquor licenses

Media statement by the MEC for Economic Development, Qedani Mahlangu on the progress made since the announcement of moratorium on issuing of liquor licenses

Let me take this opportunity to state the obvious, and something which we said during the budget vote in July. Then, we said alcohol abuse continues to be the scourge that destroys the moral fibre of this nation, and we have to confront it head-on.

Consequently, we said the department was going to embark on a number of initiatives to deal with this challenge.  Amongst the measures we announced was the six-month moratorium on all new liquor licence applications. I am happy to announce that we have been able to put our house in order.

The moratorium which took effect on the 8th of August this year sought to allow the department to improve its efficiency and set up proper structures and systems to solve a myriad of problems that dogged the liquor licensing process. However the moratorium has not been without challenges.

Since the announcement of the moratorium we received three legal challenges on the validity of the moratorium all brought by one consultant. We are glad that in all these legal challenges the court ruled in favour of the department, expressly stating that the Executive Authority has the power to announce and implement a moratorium.

In respect of reduction or elimination of the backlog the following has been achieved. Since the Board was appointed on 20 June 2011, there were approximately 2 450 applications comprising a variety of Sections of the Gauteng Liquor Act, excluding Section 104 (Conversions). Section 23 applications account for approximately 80% of the variety of these applications.

To date, the Board has considered 1 314 applications. A sizeable number of the outstanding files are still with the Local Committees for consideration. We have put systems in place to expedite these applications to be brought to the Board for consideration. We are confident that upon the lifting of the moratorium on the Section 23 applications, the balance on these applications would have been eliminated or substantially reduced.

We have been able to make progress because we paid particular attention to specific problems that confronted the liquor licensing process. These, in part, related to Information technology (IT) and business systems in respect of licence applications and issuing. An IT and business processing system has been designed and will be operational in respect of the Occasional and Catering Permits as at the 17th November 2011.

The distinguishing features of the system entail swiftness, robustness, efficiency, reliability and human interference free. Furthermore, the system utilises interactive mechanisms including but not limited to SMS and emails. 

It is against this background that we have decided to lift the moratorium in respect of Occasional and Catering Permits, with effect from the 17 November 2011. However, the moratorium remains in place for other licence categories.

We hope this will, among others, create an environment in terms of which members of the public who qualify to apply for such applications can have the opportunity to do so. This will also create confidence in members of the public and the relevant stakeholders in what we promised.

Similarly, stringent measures have been introduced to curb the issuing of fraudulent licenses. To date, we are confident that no fraudulent licenses have been issued. The IT and business processing system will further ensure that in future reliability can be placed on any licenses issued.

We are extremely concerned about the monopoly issues affecting the liquor industry. We are cognisant of large retailers involved in liquor, establishing their dominance in traditional black townships. These have a tendency in some respect of undermining our effort in ensuring that we create a conducive economic environment for black entrepreneurs to prosper in the liquor industry.

We are also cognisant of the fact that these large liquor retailers enter the black townships under franchised method with the purported view of empowering black entrepreneurs. Whilst this is encouraged in all respect, we are introducing measures to ensure that from a liquor industry perspective this is not abused thus resulting in the creation or perpetuation of a monopolistic environment.

The liquor license renewal season for the year 2011/12 commences on the 1 December 2011. Gauteng liquor license holders who have received their converted licenses are advised to check the date stamp on their liquor licenses and to renew their licenses on or before the date that appears on their licenses.

Those, whose licenses are not stamped, are requested to bring their licenses to the head office of the Gauteng liquor board. As part of assisting with this process, DED mobile services will also be going around the province to help clients with the status of their licenses.

We are also concerned about the quality of public participation in the issuing of liquor licences. This is one issue which we want to strengthen. How is done currently, is open to manipulation and we need to fix this.  In this respect, to the extent to which the application for a liquor license is affected by the 500m radius rule, operators need to get the consent in writing from the following stakeholders, school governing bodies, representatives of places of worship, SAPS, neighbors  and Social Development agreeing to have a shebeen in the residential area concern. Failure to get approval from these stakeholders no permit will be considered. We are also exploring legal instrument for those who want to sell (take away) within the residential areas.

What is also of  concern is the role individual lawyers and their law firms who charge exorbitant fees to help people apply for licences the fees range anything from R10 000 to R50 000 for taverns and liquor stores. Fixing the system will displace these middle people and consequently reduce the cost of doing business.

In conclusion, I want to take this opportunity to thank the new liquor board for the sterling work in the few months that it has been in office. Equally, we want to thank the Department’s administration for the energy and hard work invested in solving liquor problems.

For inquiries contact:
Mandla Sidu
Cell: 082 773 9013