THE government plans to set the minimum unit price below which no unit of alcohol can be sold in the country as it battles to reduce the consumption of cheap booze and alcohol-related harm.
Public comment on the proposals by the National Treasury closed last Friday and after the public consultation process is concluded the input will be revised and announcements are expected to be made in Finance Minister Enoch Godongwana’s budget speech in February next year.
According to Treasury, the World Health Organisation (WHO) recommends the establishment and implementation of minimum prices for alcohol, where applicable, which is premised on the understanding that the more affordable alcohol is, the more it is consumed and the greater the level of related harm.
This means that setting a minimum price per unit gram of alcohol reduces consumption of cheap alcohol and alcohol-related harm.
Treasury also cites a 2021 study conducted by the University of Cape Town’s Prof. Corné van Walbeek and Dr. Grieve Chelwa, which found that the unit price of over 90% of alcohol consumed by regular heavy-drinking households was valued at around R5 or less per standard drink.
The two academics concluded that imposing a minimum unit price appropriately above what regular heavy drinking households pay for alcohol will have the highest impact on alcohol consumption even though this group is least price sensitive.
This is mainly due to the propensity of regular heavy drinking households to consume low priced alcohol products and the minimum unit price will disproportionately increase the price for heavier drinkers than for moderate drinkers, according to the study.
WHO has also noted that heavy drinkers tend to drink the cheapest alcoholic beverages and minimum pricing is able to target heavy drinkers without burdening moderate or light drinkers.
Treasury has backed, in principle, the implementation of minimum unit pricing and indicated that the government collectively should consider how such a mechanism, given the South African context of alcohol-related problems, could form part of the package of interventions.
Minimum unit pricing also prevents producers and retailers from absorbing some of the tax increases and reducing prices or offering substantially discounted prices on alcoholic products.
Treasury has noted that high volume of relatively cheap wines in the market have raised concerns of alcohol harm, hence the call for the government to explore minimum unit pricing and changing the bases of taxation to alcohol content.
In addition, the illicit alcohol market is propelled by consumer demand for lower-priced illicit products and Treasury wants minimum unit pricing implemented together with consumer education about potential harm from consuming these products and enforcement.
“Under minimum unit pricing, there is no longer a possibility of ‘trading down’ as there is no alcohol available for less than the floor price,” Treasury stated.
In a briefing before the National Assembly’s portfolio committee on trade, industry and competition in October, the Department of Trade, Industry and Competition (DTIC) explained the delay in processing the Liquor Amendment Bill, which was first published for public comment in 2016.
The bill provides for the restriction of advertising of liquor on certain platforms, increasing the supply and drinking age from 18 to 21 and imposing certain liability on the manufacturers, distributor and retailers and increase penalties to encourage compliance with legislation, among others.
The DTIC said intergovernmental engagements on liquor abuse and measures to reduce it resulted in the Cabinet memorandum on government-coordinated approach to address the challenges of liquor abuse and that this was approved in November last year.
Aadielah Maker Diedericks of the Southern African Alcohol Policy Alliance, which is a collaboration of civil society organisations across the region, told the Sunday Independent that they welcome Treasury’s efforts and look forward to an announcement that will introduce minimum unit pricing as part of a package of interventions to address alcohol-related harm.
“We call on the DTIC to urgently process the Liquor Amendment Bill of 2016,” she said.
In addition, Maker Diedericks said the government’s recent efforts to register spaza shop owners should be urgently applied to registering shebeen owners.
“The 172 alcohol-related deaths per day and cost to country of between ten and 12% of GDP (gross domestic product) require the same urgent intervention. Internationally, it has been shown that alcohol availability increases consumption and consequently harms,” she explained.
Maker Diedericks said the government collectively needs to address the prolific presence and high density of alcohol outlets in residential areas.
She added the country has just come out of 16 days of activism against violence against women, where evidence shows an association of gender-based violence incidence with alcohol availability and consumption.
“Going into the holiday period where people have more disposable cash on hand with limited access to social and recreational activity, addressing availability in communities by enforcing existing laws and introducing new laws is a necessary intervention to preserve and protect lives in South Africa,” Maker Diedericks stated.