The new draft liquor Bill is scheduled to be processed by Parliament’s trade and industry committee amid concerns that the legislation gives the line minister significant powers to determine access to business opportunities in the industry.
The Bill states that the objects of the legislation are ”to reduce the socio-economic and other costs of alcohol consumption by setting national norms and standards”, but it also aims to promote ”the entry of new participants” into the liquor industry, while promoting diversity of ownership.
The key concern is to promote black economic empowerment in the liquor trade.
Wording in the Bill that may be worrying, particularly to big liquor product manufacturers, is the section entitled ”disposal of interests in other tiers of industry”.
This states that a registered manufacturer must dispose ”of all of its interests” in distribution, micro-manufacturing or selling of liquor ”within three years of the commencement of the Act”.
In addition, a distributor must dispose of all of its interests in liquor manufacturing, micro-manufacturing or retail liquor sales. A seller of liquor for consumption must also do so in the other tiers in a similar time frame.
A micro-manufacturer means ”a producer, rectifier, blender, broker, distiller, bottler of liquor or a wine farmer, who in a calendar year does not deal in the volume of liquor that exceeds the prescribed volume”. This will be determined in regulations by the minister.
The legislation places restrictions on persons who may be registered or licensed to sell liquor ”without the approval of the minister” (of trade and industry) if that person ”is a registered manufacturer or distributor of liquor”. This implies that the minister will have discretion in determining exceptions to the general principle of avoiding vertical integration in the sector.
This wording puts a further question mark over whether the larger manufacturers of liquor products will be able to distribute their own products or even operate in the retail sector.
MPs serving on the committee said the legislation was in draft form and the committee had not yet been briefed on the legislation. This will happen in the last week of March.