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Alcohol adverts ban ‘will not banish thirst for booze’.
Alcohol adverts ban ‘will not banish thirst for booze’.

Alcohol adverts ban ‘will not banish thirst for booze’

LIQUOR NEWS

By Nick Hedley - Apr 6th 2018, 10:35

A ban on liquor advertising would strip broadcasters of a considerable source of revenue and probably dent the struggling South African economy, but would do little to combat alcohol abuse, experts say. 

As part of its efforts to curb the misuse of alcohol, the government is considering the Liquor Amendment Bill, which could result in a ban on alcohol advertisements on television and radio between 6 am and 10 pm. The bill also includes a proposal to lift the legal drinking age from 18 to 21.

The Department of Trade and Industry (DTI) argues that the intervention is necessary since SA is among the biggest consumers of alcohol in the world, while fetal alcohol syndrome rates are the highest globally.

The state spends nearly R4bn a year on tackling problems related to alcohol abuse, and according to the DTI’s submissions, studies show that raising the consumption age could be an effective tool to combat this.

However, if they go ahead, the advertising regulations would take a bite out of the local economy, according to Johannes Jordaan, economist at Economic Modelling Solutions, who says there is no clear link between alcohol consumption and advertising spend.

However, the effect would not be as significant as a total advertising ban, which the Health Minister Aaron Motsoaledi has punted.

According to an earlier report by Jordaan and a group of researchers at Econometrix, a total ban would shrink the economy by 0.28%. That includes lost advertising expenditure and reduced sponsorships for the sports and events industry. Castle Lager, for instance, spends significant amounts on sponsoring rugby, cricket and football tournaments and teams.

Sibani Mngadi, chairman of the South African Liquor Brandowners Association (Salba), said that with no media exposure "there will be little to no incentive to sponsor sports events or teams", although it was unclear whether the rules would apply to international events. It was even uncertain whether local television stations would be allowed to broadcast all 2018 Fifa World Cup matches, as the football tournament was sponsored by Budweiser, he said.

The television industry would feel the brunt of the ban more than other media segments, according to marketing and media analyst Chris Moerdyk, who heads up a media industry task group on the matter.

"Television stations would certainly lose quite a lot of money — when you look at how much South African Breweries (SAB) spends on advertising, the bulk of their spend is on TV commercials," Moerdyk said.

A study for the National Economic Development and Labour Council (Nedlac), done by research firm Genesis Analytics, said banning alcohol advertising between 6 am and 10 pm would slash advertising agencies’ revenues by R400m while the media would take an R800m hit — particularly television broadcasters.

According to Mngadi, an irony in the proposed changes is that the Liquor Amendment Bill requires transformation and diversification in the industry, and yet the advertising ban would turn out to be an impediment to newcomers.

Instead of restricting marketing, he said stricter law enforcement, including the mandatory use of identification to buy alcohol, targeting adverts at adults only and alcohol awareness campaigns were better options. "Our intention is to increase spend from R10m to R150m per annum on these programmes."

Citing research by Genesis, Mngadi said this "more holistic approach" would be a better way to deal with alcohol abuse.

Wine expert Michael Fridjhon said, as was the case when cigarette advertising was banned, the bill would entrench the dominance of the largest alcohol brands and prevent new entrants from gaining a foothold in the market.

The large illicit alcohol and drugs market showed that advertising did not drive consumption and alcohol abuse.

"There’s a very simple test: how much advertising do the drug merchants do? So the problem is not one of licensing, the problem is one of policing. There’s ample legislation but inadequate policing."

Instead, the government should focus on education and the enforcement of existing rules, he said.

But if the legal drinking age was raised to 21, "you can’t begin to educate kids at school because they’re three to five years off the drinking age".

Alcohol abuse rates are higher in countries with more prohibition on drinking, according to Fridjhon. For instance, the US raised the drinking age in the mid-1980s to reduce road accidents caused by intoxication.

But research in the Journal of the American Academy of Child and Adolescent Psychiatry shows that binge drinking in the US among young adult males has not declined, while binge drinking among non-college women has actually increased by 20%, and among college women by 40%.

However, the Genesis report takes a different view, saying young people exposed to alcohol advertising are more likely to start drinking earlier and drink more.

Martin van Staden, legal researcher at the Free Market Foundation, said raising the drinking age was "condescending and tyrannical" and would not work.

"People the government deems mature enough to vote, marry freely, choose careers, drive cars and enter into contracts will no longer be allowed to drink with friends or at a meal or even at their own weddings if this bill is adopted," Van Staden said.

Meanwhile, one analyst, who asked not to be named, said large beverage producers may be able to keep their brand awareness alive by launching alcohol-free versions of their products and advertising or sponsoring sports teams with those products.

SAB and AB InBev Africa launched Castle Free in October 2017, and "others would probably climb on the bandwagon", the analyst said.

Nirishi Trikamjee, corporate affairs director at SAB and AB InBev Africa, said SAB was working with relevant government departments on the impending changes.

SAB and its peers had "revitalised" and rebranded the Association for Alcohol Responsibility and Education to combat alcohol abuse.

This association had revised its code of commercial communications and the industry was committed to self-regulation through "responsible messaging", for instance.

Gail Schimmel, CEO of the Advertising Standards Authority of SA (ASA), said the alcohol industry "is a successful study in self-regulation", given its high degree of compliance.

"We receive very few complaints," Schimmel said.

ASA figures show that since 2014, only 13 complaints against alcohol advertisements have been formally investigated. Nine were lodged by consumers — three of those were upheld — and four by competitors.

Trikamjee said, "SAB acknowledges the challenges of alcohol-related harm and accepts that the incidence of alcohol abuse in our country is too high". Tackling alcohol-related harm was "an imperative", as was industry transformation and broad-based economic development.

© BusinessLIVE MMXVIII 

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