Johannesburg - The tragedy in the Eastern Cape at the Enyobeni Tavern, which resulted in the death of 21 young people, has put the liquor trading business in the spotlight.

Entrepreneurs looking to start a business may find selling alcohol to be a very lucrative business. South Africa has 34 500 licensed tavern owners, 10 000 shebeen permit holders, and 2700 independent liquor store owners.

There are strict regulations that need to be adhered to by entrepreneurs who seek to establish enterprises that sell liquor to the public. Liquor licences are applied for and granted in accordance with the provisions of each province's liquor act.

Acquiring a liquor licence can cost anything from R15 000 to R25 000.

Any person who is above the age of 18 can apply for a liquor licence. Businesses and Closed Corporations may also apply.

The following persons may not apply for a liquor licence:

1. Any person who received a jail sentence without the option of paying a fine,

2. Any person who was declared insolvent but not yet rehabilitated,

3. Any Company, Close Corporation, or Co-operative in which either persons mentioned in 1 or 2 above has a shareholding or member’s interest, or any partnership or trust that the person is involved with, are also excluded.

There are two types of liquor licenses: on-consumption and off-consumption. The first is to sell liquor that can be taken on the premises (like in a restaurant) and off-consumption where the liquor cannot be consumed on the premises but must be taken away. It is possible to get a licence that allows a combination of the two.

Licences must be renewed each year and if the renewal license is not paid on time, the license will lapse. You will then have to apply for a new license all over again, so make sure that you are aware of when you must renew the licence so that you do not lose it.

The supporting documents required when applying for a liquor licence are certified copies of IDs of the applicant, business registration forms, proof of address, and premises layout approved by the municipality.

A South African Police Services (SAPS) police clearance certificate not older than three months from the date of issue is also required.

You will also need a tax clearance certificate and a BEE certificate, if applicable.

It is also important to note that liquor licences are issued to the premises and not individuals. This means that it cannot be used at any other location other than the one it has been issued for.

Acquiring a liquor licence is pretty straightforward, but keeping it may sometimes prove to be difficult. Owners of establishments like taverns need to be vigilant and enforce the law.

An example of some of the laws that were flouted at the establishment where 22 young people lost their lives in the Eastern Cape, were laws regarding the drinking age fall under the National Liquor Act (Act 59 of 2003). In short, these laws outline the legal age at which individuals are allowed to purchase and consume alcoholic beverages as 18 years.

It has also come to light that the incident happened after closing hours.

The establishment’s liquor licence has now been revoked by the Eastern Cape Liquor Board.

According to the South African Liquor Traders Association’s (SALTA) website, its core values are to encourage members to trade responsibly.

They are also implored not to sell alcohol to pregnant women, children, and already intoxicated patrons. Encourage members not to encroach on the rights of other community members by respecting allowed trading hours and respecting by-laws.

Abiding by these regulations will go a long way in ensuring that traders are found to be compliant with the law and ensure they do not have their licences revoked.

Jones Mnisi from SALTA said, “We normally hold meetings to teach our traders how to comply with the regulations, we do not condone selling liquor to underage patrons.”

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Enyobeni Tavern deaths: What it takes to get and to lose a liquor licence in South Africa