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Will new liquor laws stifle the economy?

Metrosmag,SA

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31 October 2016 was the deadline for comment submissions on the proposed amendments to the Liquor Act 59 of 2003. The amendments, proposed by the Department of Trade and Industry are well-intentioned, but they need to be more balanced to preserve an industry vital to the economy.

The changes, as depicted in Government Gazette 40319 of 30 September 2016, are designed primarily to bring unregulated liquor trade under control, curb the growing socioeconomic effects of alcohol abuse, uphold empowerment requirements, and build capacity for enforcing compliance.

First, its proposed that excise duties on alcohol be increased. Many consumers are price sensitive so by making liquor more expensive, the government hopes to dissuade excessive consumption.

However, because of their dependency, alcoholics and alcohol abusers are not as price sensitive and will always find a way to obtain liquor. They’ll either sacrifice essentials or deal through the black market. It’s more likely then that the casual drinker will be the one cutting back and this would result in  losses for the industry. Education and access to intervention is what’s needed. In the National Treasury discussion document issued May 2014, it is expressed that “social problems arising from excessive alcohol consumption might be exacerbated if sharp increases in excise duty result in some drinkers turning to unsafe illicit products and potentially harmful home brews”. “Alcohol tax increases may also give rise to unintended shifts in consumer behaviour … that could undermine government’s health objectives. The effectiveness of alcohol tax policy depends on the extent to which alcohol taxation discourages excessive alcohol consumption and its impact on the economy and illicit trade.”

Further, the proposed legislation defines where liquor may be sold. The DTI must be commended for setting the distance of outlets beyond 500 metres from schools, rehab centres and other sensitive locations.

Disallowing distribution at petrol stations, and premises near petrol stations or public transport stops, also limit convenient access.
But one has to question the validity of  prohibiting the sale of wine in grocery stores, as wine sales is unlikely to be a significant contributor to abuse, as beer and spirits is generally the major contributors. It is unlikely that a consumer intending to abuse alcohol will opt for a bottle of wine costing far more than beer or some spirits.. Yes, it does take alcohol away from the public eye and makes it less convenient to obtain. But this is a public that contributes to liquor revenues generally through sensible consumption, not abusers who drink with abandon.

Let’s not forget that this bustling industry is a significant player in the country’s economy. According to  the National Treasury report, the liquor sector contributed an estimated R73 billion for fiscal year 2009/2010, or 2.9% of South Africa’s GDP. The same report indicates that it sustains an estimated 522,000 employment opportunities. These values are even greater today. This equates to massive tax revenues for government and a meaningful contribution towards funding budgetary goals and employment, not to mention the export of our wines and other alcohol products.

It’s true that numerous reports have revealed a correlation between drinking and violent crime, traffic accidents, domestic violence and other social problems. But to what degree they are mitigated by reducing alcohol consumption and which communities benefit from across-the-board restrictions varies from study to study.

By no means is the suggestion being made that social instability or the loss of life be ignored in favour of revenues. But is clamping down on an industry that does far more good the best way to address the problem?

Surely a better solution is to bolster programmes that educate the public on good drinking habits and the dangers of abuse, and offer support to those in need of rehabilitation. Such programmes should target the abuser’s reasons for drinking excessively rather than the act itself.

Of greater merit are the amendments designed to bring under control the illicit production and distribution of liquor.

Persons from other fields will be designated as inspectors acting on behalf of the National Liquor Regulator. These include police officers, traffic officers, health and safety inspectors, medical inspectors, and others. Although they’ll need training as prescribed by the Minister, they’re in a prime position to carry out checks during the course of their duties. In this way, the law hopes to build the required capacity for enforcement.

With these resources, unlicensed outlets can be identified and brought to book. Such businesses not only fuel abuse by selling to already drunk or under age customers for the sake of profit, but also contribute nothing in the way of excise.

The liquor they sell often comes from legitimate vendors. Under the proposed amendments, greater requirements on suppliers to ensure they are selling to licensed traders or they will be held equally accountable for claims resulting from liquor-related incidents.

The proposed amendments will also introduce restrictions with regards advertising and promotions.

The proposed amendments also suggest an increase of the legal drinking age from 18 to 21. We regard a person on his 18th birthday as an adult that can drive a vehicle, vote, enter into contracts, get married, and even get a firearm license, but can’t purchase or consume alcohol. This proposal is unlikely to succeed, and more likely to force 18 to 21 years olds to seek alcohol in illegal manners.

In conclusion, the intention of the law is good and much of it seems beneficial. But overall, it puts a vital economic contributor in danger as well as the many workers who depend on it for their daily bread.

As lawmakers, the DTI should closely monitor the efficacy of this new legislation, and should adapt their approach to solve these very real problems while considering the knock-on effects to national concerns.

Metrosmag,sa ( inspired by Mzansi Lifestyle ) Mzansi is rich in Lifestyle, a nation diverse in race and culture. Mzansi Magazine explores the rich heritage , versitile culture and the celebrations of Life in Mzansi. Metros Magazine, SA is South Africa's informative Metropolitan lifestlye magazine with all the fresh and important news in Mzansi.

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Sim Tshabalala becomes first Standard Bank black CEO

Metrosmag,SA

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Sim Tshabalala has become the first black person to lead Africa’s largest bank by assets without sharing power, after his co-CEO stood down, South Africa’s Standard Bank said on Tuesday.

Tshabalala, a 49-year old company veteran who describes himself as “a Zulu boy from Soweto”, joins only a handful of black executives at the helm of one of the country’s top-40 blue-chip companies.

He is the second black person to run one of the top five South African banks after Sizwe Nxasana took the reins for five years in 2009 at rival FirstRand in a sector often criticised by politicians for a lack of diversity more than two decades after the end of apartheid.

In an unusual statement from the government on company executive appointments, Finance Minister Malusi Gigaba called the appointment an affirmation of the capacity of black professionals.

“Along with the work that is currently ongoing in parliament to address the slow pace of transformation in the financial sector, Mr Tshabalala’s appointment comes as a step in the right direction,” Gigaba said.

Tshabalala, a lawyer, was appointed alongside Ben Kruger in 2013 to sharpen the company’s Africa focus and clean up a costly blunder by then chief executive Jacko Maree to try to turn Standard Bank into a major emerging markets lender.

“The board is satisfied that the structure, which was necessary in 2013, has met and in many respects exceeded expectations,” Standard Bank Chairman Thulani Gcabashe said in a statement.

“Good momentum has been achieved in the implementation of the group’s refreshed strategy.”

In their joint 4 1/2-year tenure, Standard Bank has added branches across Africa while selling assets in Russia, Turkey, the United Kingdom and Argentina under a revamped strategy that scaled back its ambitions outside the continent.

Kruger will stay on as an executive director, and will report to Tshabalala, Standard Bank said.

Black executives’ lobby group, Black Management Forum (BMF), welcomed Tshabalala’s appointment, saying it showed Standard Bank had respect for black talent.

“The BMF trusts that this announcement will mark an end to the joint CEO appointments phenomena that we have come to see,” the group said.

BMF generally criticises the appointment of two bosses, saying it is often done when “the most deserving candidate is a black person.” It also says it stifles accountability and adds costs to a company payroll.

Synthetics fuels giant Sasol is another high profile company with two bosses. The company is led by Bongani Nqwababa and Stephen Cornell.

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Direct selling providing more opportunities for more women

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Johannesburg, 16 August 2017 – Figures just released indicate that unlike many other sectors in the economy direct selling is growing, providing more micro-entrepreneurial and income generating opportunities for women.
Currently some 1 333 223 South Africans benefit from direct selling and have the opportunity to build their own small business, of which 72% are women.
Despite the flagging economy, direct sales in 2016 were 18 percent up on 2015, totalling nearly R12.9 billion
According to Cornelle van Graan, chairperson of South Africa’s Direct Selling Association (DSASA), direct selling attracts female entrepreneurs because it offers opportunity, flexible working hours, training and the ability to work from home.
The number of women who make a full-time living from direct selling has grown by almost 30% with the majority operating in the health and wellness, personal care or household good sectors.
Van Graan says that the sector also provides opportunities for women who have an existing full-time job, but want to supplement their income.
“Direct selling is also a good way for stay-at-home mothers to make a living, while being actively involved in the lives of their children. Getting started is generally easy, low cost and low risk.”
“Mothers usually have an existing network of other moms, giving them excellent access to a market with similar needs and interests. Their personal relationships and endorsement gives buyers confidence, so these women can be very effective sales people.”
About three-quarters of all direct sales people in South Africa are involved part-time.
Besides flexibility and access, part of the appeal of direct selling may be that money can be earned immediately the sale is made. There’s no waiting until the end of the month or the next payment cycle.
Van Graan says while motivation can vary from paying for a child’s education to saving for a dream holiday, most women get involved in direct sales to provide for their families.
There are 34 direct selling companies who are members of the DSASA. There are more than a million independent business owners associated with DSASA member companies. They make sales totalling nearly R13 billion a year. Everything from financial services to beauty products and skin care, from fragrances and fashion accessories to nutrition and health supplements, from dinner services and a host of other tableware and kitchenware to household cleaning supplies are sold.
What you need to know about direct selling:
If you are thinking of becoming a direct seller here’s what you need to consider to help decide what direction you want to pursue.
1. Product selection
The direct selling industry offers a range of products within sectors such as health, beauty, homeware, financial and investment products, nutritional supplements and weight-loss management. Although it is preferable to choose products which you are familiar with or interested in, you will receive training on all products being offered by the DSA member company that you choose to join. Believing in your product is vital to effectively market and sell your product, as well as personal fulfilment.
2. Choosing which company
Visit www.dsasa.co.za for a full list of member companies and scroll down and identify the companies offering the type of product or service of interest to you or the business opportunity that appeals to you. Attend a demonstration or visit the website of the company to help decide which company you feel best suits your needs and ideals.
3. Research appealing companies
Read through all their marketing collateral and agreements to get a good understanding of the stability and history of business and of your responsibilities.
4. Investigate the start-up costs
All DSASA member companies are obliged to keep start-up costs low. Your initial investment will typically cover a sales kit with all company information, product samples and training materials. Avoid companies expecting a large investment or who push overzealous inventories, you should be allowed to grow at your own pace and affordability.
5. Study the return policy
All DSASA member companies are obligated to buy back any unsold, re-saleable product inventory, promotional materials, sales aids and kits purchased within the previous 12 months at the selling price less an administration fee of up to 10% of the selling price.
6. Fully understand the compensation
Check the member companies’ compensation plans as they all differ. Make sure you understand details of earnings and the overall business model.
Ends.

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Veolia signs landmark B-BBEE deal with Ceracue

Metrosmag,SA

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“Veolia was looking for a local development partner with strong project experience in the water treatment markets,” explains Gunter Rencken, Managing Director, Veolia Water Technologies South Africa. “In Ceracure, with whom we’ve had a less formalised working partnership for about four years, Veolia has a hands-on, active B-BBEE partner with a thorough understanding of our core business and the water treatment market.”

This close alignment in corporate vision lays the basis for a synergistic approach to increased business development in both South Africa and Africa. “With this partnership in place, Veolia can confidently amplify business development avenues and enhance our project reach in the municipal and industrial markets,” Rencken continues.

“In addition to demonstrating Veolia’s seriousness to transformation and social development, it also means we’ll be able to supply water treatment solutions encompassing a broader scope of works,” explains Langa Nxumalo, Managing Director, Ceracure. “Together, we can advance our technical and business capabilities, offering a superior and integrated solution for water treatment projects. This ‘one plus one is equal to three’ strategy will allow better project execution in line with clients requirements, all thanks to a good balance sheet and technical experience by Veolia.”

The partnership will also see Veolia South Africa taking an active approach to expanding Ceracure’s business capabilities. “We are assisting Ceracure with achieving a higher CIDB grading, and have planned for a structured transfer of technology and skills of Veolia’s water treatment expertise to Ceracure,” Rencken explains.

Veolia’s shareholding arrangement with Ceracure represents an important pillar of the company’s new vision that is enhancing the water solutions specialist’s delivery of highly efficient, low-footprint water treatment technologies in South Africa and Africa. Alongside the B-BBEE deal are a range of recent organisational and technological innovations that have streamlined the company’s manufacturing, distribution and service networks across the region. Veolia South Africa is now positioned as a key technology and manufacturing hub for Veolia’s new range of standard engineered products and systems as well the company’s range of Hydrex™ speciality chemicals.

“We are excited to welcome Ceracure on board, and look forward to a fruitful synergy with them as we continue to tackle Africa’s water treatment challenges,” Rencken concludes.

Veolia group is the global leader in optimized resource management. With over 163 000 employees worldwide, the Group designs and provides water, waste and energy management solutions that contribute to the sustainable development of communities and industries. Through its three complementary business activities, Veolia helps to develop access to resources, preserve available resources, and to replenish them.In 2016, the Veolia group supplied 100 million people with drinking water and 61 million people with wastewater service, produced 54 million megawatt hours of energy and converted 31 million metric tons of waste into new materials and energy. Veolia Environnement (listed on Paris Euronext: VIE) recorded consolidated revenue of €24.39 billion in 2016.

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