National Liquor Policy 2017 and Regulatory Framework Overview

THE PROPOSED NATIONAL LIQUOR POLICY 2017 wendy@restaurant.org.za 0117052054

Legislation and Business Regulation the dti develops and reviews regulatory systems in the areas of competition, consumer protection, company and intellectual property,as well as public interest regulation. It also oversees the work of national and provincial regulatory agencies mandated to assist the dti in providing competitive and socially responsible business and consumer regulations, for easy access to redress and efficient markets.

Functions of the NLA The NLA is charged with the responsibility of regulating the macro manufacturing and distribution tiers of the liquor industry by registering macro manufacturers and distributors of liquor to trade. The NLA educates internal and external stakeholders about the Act. Empowers stakeholders with information on how to apply for registration at the NLA by capacitating trading associations with training and creating general awareness of the effects of alcohol abuse. Conduct inspections on premises and check suitability and compliance with the provisions of the Act. Investigates complaints submitted in the prescribed form. Monitors and enforces compliance with the Act. Inspects any document that a person is required to maintain in terms of the Act. Seize any liquor that appears to have been manufactured contrary to the provisions of the Act.

The National Liquor Act and the Regulations Why a new National Liquor Act? The Liquor Act 59 of 2003 came into effect on 13 August 2004. Before proclamation, provincial Liquor Authorities were responsible for the regulation of all the value chain categories of the Liquor Industry. The Act provides for the manufacturing and distribution of liquor to be regulated at national level while micro manufacturing and retailing continue to be regulated at provincial level. A new National Liquor Authority (NLA), housed in the Consumer and Corporate Regulation Division of the dti, is responsible for administration of the Act. The NLA will receive, evaluate and recommend to the Minister applications for national manufacturing and distribution licenses and related matters. A National Liquor Policy Council, comprising the Minister of Trade and Industry and relevant Members of the Executive Council of the provinces, will formulate and co- ordinate policies and embody co-operative governance. An important aspect of the new Act is social responsibility. Those wishing to register must set out their commitment to black economic empowerment, and their proposed contribution to combating alcohol abuse, as well as how they will restrict or promote job creation, diversity of ownership, exports, competition, new entrants to the industry and efficiency of operation. Failing to meet these commitments can result in a review of or placing new conditions on registration

The National Liquor Act and the Regulations Why a new National Liquor Act? The Liquor Act 59 of 2003 came into effect on 13 August 2004. Before proclamation, provincial Liquor Authorities were responsible for the regulation of all the value chain categories of the Liquor Industry. The Act provides for the manufacturing and distribution of liquor to be regulated at national level while micro manufacturing and retailing continue to be regulated at provincial level. A new National Liquor Authority (NLA), housed in the Consumer and Corporate Regulation Division of the dti, is responsible for administration of the Act. The NLA will receive, evaluate and recommend to the Minister applications for national manufacturing and distribution licenses and related matters. A National Liquor Policy Council, comprising the Minister of Trade and Industry and relevant Members of the Executive Council of the provinces, will formulate and co-ordinate policies and embody co-operative governance. An important aspect of the new Act is social responsibility. Those wishing to register must set out their commitment to black economic empowerment, and their proposed contribution to combating alcohol abuse, as well as how they will restrict or promote job creation, diversity of ownership, exports, competition, new entrants to the industry and efficiency of operation. Failing to meet these commitments can result in a review of or placing new conditions on registration. .

The National Liquor Act The liquor Act 59 of 2003 repeals the 1989 Act only in those provinces that have promulgated provincial liquor legislation (Currently Eastern Cape and Gauteng). The Liquor Act of 1989 remains in force in provinces that have not promulgated liquor legislation. As from 13 August 2004 provincial liquor authorities can no longer regulate activities of distributors and manufacturers whose liquor volumes meet or exceed the set thresholds. Applications received by provincial liquor authorities before this new Act must be disposed of by them in terms of the 1989 Liquor Act.National Liquor Act Regulations Annexure to Regulations Liquor Amendment Regulations, 2013 - Government Gazette No. 37091 Liquor Amendment Regulations, 2008 - Government Gazette No. 30718

Research for the Liquor Policy Anti-Substance Abuse Programme of Action - 2011 2016 Baseline study of the liquor industry Including the impact of the National Liquor Act 59 of 2003 Alcohol demand/consumption patterns in South Africa Impact Assessment on the Effectiveness of the Liquor Act 59 of 2003 Global Strategy to Reduce the Harmful Use of Alcohol

National Liquor Authority Conference Presentations the dti National Liquor Authority hosted a one-day conference on 08 March 2012 in Gauteng Province. The conference was used as a platform to discuss the role and future direction with regards to the National Liquor Policy and the impact thereof on the South African economy. The conference featured a key note address and presentations from experts in the field. The Deputy Minister, Elizabeth Thabethe led the opening activities of the conference. Presentation by the CDA at the Liquor Regulation Conference Drinking Age Limit: The "ideal" for the South African context How much is enough? The effectiveness of current policy Increasing the age-limit: Youth Perspective Location of Liquor Outlets & Trading Hours Challenges in Enforcing the Liquor Regulatory Acts SARS Presentation Socio-Economic Impact of Liquor Outlet Location and Density Presentation on the Liquor Act 59 of 2003: The highlights and gaps Minimum Legal Drinking Age: What is ideal for South Africa? Global Status on Alcohol Abuse: How is South Africa rated and the implications for policy Industry Models to Mitigate Liquor Abuse The Effects of the Location of Outlets, Density and Trading Hours on Communities

FAQS for the Liquor Policy

Question Answer 1. What is the National Liquor Authority (NLA)? The National Liquor Authority is a regulatory body within the Department of Trade and Industry (the dti) responsible for administering The National Liquor Act 2003 (Act No.59 of 2003). 2. What is the role and function of NLA and NLA is responsible for the regulation of macro manufacturers and distributors of liquor. 3. Who does The National Liquor Act apply to? The Act applies to the registered macro-manufactures and distributors of liquor. 4. Who is a macro manufacturer? A macro manufacturer is a person or entity that manufactures liquor above the prescribed volume thresholds i.e. Beer: 100 million litres Sorghum beer : 50 million litres (traditional African beer) Wine : 4 million litres Spirits: 2 million litres 5. Who is a micro-manufacturer? A micro manufacturer is a person or entity that manufactures liquor (beer, sorghum beer, wine and spirits) below the prescribed thresholds of macro-manufactures. 6. Who is a liquor distributor? A distributor is a person or entity that is registered with NLA and sells liquor only to other liquor license holders.

7. Are there prescribed distribution volume thresholds for liquor distributors? No, there are no prescribed distribution volumes thresholds for liquor distributors. 8. Who is a liquor retailer? A liquor retailer is a licensed liquor trader that is licensed to only sell liquor to consumers above the drinking age limit (18 years). Examples of retailers include liquor stores, restaurants, pubs, bottle- stores, retail outlets and taverns. 9. How do I apply for a manufacturing and/or distribution license? You need to visit the NLA online system https://thenla.thedti.gov.za or visit the dti Campus NLA Walk-in Centre. All the instructions should be properly followed and required information provided. 10. Can a liquor trader hold a dual license for both macro manufacturing and distribution? Yes; a liquor trader can be both a macro- manufacturer and a distributor of liquor. The applicant will have to submit an application clearly stating the request on the application form. 11. Where can a person apply for a macro manufacturing and/or distribution registration? You need to visit the NLA online system on https://thenla.thedti.gov.za or visit the dti Campus NLA Walk-in Centre. All the instructions should be properly followed and required information provided. 12. Where can a person apply for a micro- manufacturing or retail liquor license? An application for a micro-manufacturing and or retailing license may be lodged with a Provincial Liquor Authority/Board

13. When can I submit a new application? Anytime via the NLA online system. https://thenla.thedti.gov.za 14. Are there any fees payable when applying for a liquor registration? Yes. There is a set of prescribed fees for various types of transactions, for example for new application, an annual renewal fee, transfers, relocations and alterations of registered activities. 15. Do I have to pay when lodging an application with the NLA? All new registrants are obliged to pay an initial application fee of R500 and once approved you are required to pay a registration fee of R2000 (minimum), depending on the threshold volume. (See prescribed fees) 16. How do I make a payment if I am a new applicant? You can deposit cash/bank guaranteed/electronically transfer the funds into the account number below: Parent Name: Department of Trade and Industry Bank: Standard Bank Name of account: Liquor License Deposit Type of account: Business Current Account Account number: 370 650 077 Branch: Sunnyside Branch code: 01 0645 Reference Number for new applications: 01/Trading name 17. What happens if my application has been rejected, do I get my application fee back? No. The application fee of R500 is non-refundable. It is only refundable if NLA does not have jurisdiction over the application. 18. If I am already an existing registrant and want to transfer my registration to someone else, am I allowed to and how do I do it? Yes, you can make the transfer to someone else if all the prescribed requirements are met. A trading registration can be transferred by filing NLA 1and NLA 14 and submitted to the NLA and paying the prescribed transfer fee of R1500 (minimum) depending on the threshold. (See prescribed fees) 19. If I am already registered with NLA and want to relocate to new premises, will my application for relocation be granted? Yes, relocation can be made by filing NLA 14 and paying the prescribed relocation fees of R1500 (minimum) depending on the threshold. (See prescribed fees). The application will be considered and granted if all the relocation requirements are met, for example premises relocated to a zoned area.

20. How do I renew my macro manufacturing and/or distribution registration? You need to complete form NLA 28 with accompanying documents, pay the annual renewal fee and submit it to the NLA. Renewal should be done a month before the expiry of the registration. 21. How do I make payment if I need to renew my registration license? Payments can be made into the Standard bank account or at the dti. The reference should clearly be written number as follows; Reference for Renewal: 03/RG No/Trading name 22. What happens if I do not renew my registration? If the registration is not renewed within the time required, a grace period of two (2) months after expiry will be granted with penalties included. If the registration is still not paid after the grace period, it will be cancelled. 23. Can I continue to trade without a valid liquor registration? No. If your liquor registration has been cancelled you cannot continue to trade. Trading without a license is an offence punishable by law. 24. Can an applicant operate with an acknowledgement letter or NLA 6 from NLA? No, you cannot operate/ trade with an acknowledgement letter or NLA 6, you can only start operating business once you have paid and received a registration certificate; NLA 9. 25. Which zoning certificate does NLA require for new applications, relocations etc? A business zoning certificate for industrial purposed or a consent letter from the relevant municipality or a consent letter from the traditional authority in an area which is under a traditional authority. 26. Are registrants required to keep records of the traders they sell liquor to? Yes, NLA registrants are required to keep records (invoices) of entities to which liquor has been sold to? 27. Where can registrants submit their complaints? e-mail: nationalliquorauthority@thedti.gov.za the dti call center at 0861 843 384

Application Procedure Applications for macro manufacturing and/or distribution registration This guide is intended to assist any person who wishes to register as a macro manufacture and/or distributor of liquor. All macro manufacturers and/or distributors of liquor must be registered with the National Liquor Authority (NLA). The prospective registrant has to complete and submit the required information in a prescribed manner and submit it to the NLA. HOW TO APPLY FOR A MANUFACTURING AND/OR DISTRIBUTION LICENCE To apply for a distribution and/or manufacturing registration, applicants need to visit the NLA online system on: https://thenla.thedti.gov.za. All instructions should be properly followed. INSTRUCTION A: SHAREHOLDERS INFORMATION The applicant should provide the following information: Name(s) of applicant Race of applicant Gender of applicant Identity number of applicant Address of applicant

INSTRUCTION B: FINANCIAL INTEREST IN THE LIQUOR INDUSTRY The prospective registrant should indicate if they receive financial income from another entity within the liquor industry, e.g. ownership of a retail outlet, having shares in companies involved in the liquor trade etc. The prospective registrant should state where he/she has a financial interest in the liquor industry within the republic, and provide the information equally in respect of each shareholder, member, partner or beneficiary if the applicant or transferee is not an individual. INSTRUCTION C: B-BBEE AND COMBATING ALCOHOL ABUSE The applicant needs to indicate their commitment in respect of the Broad-Based Black Economic Empowerment Codes of Good Practice The applicant is expected to propose a contribution towards combating liquor abuse; he/she can make financial and/or non-financial contributions. INSTRUCTION D: The applicant should describe in detail the extent to which their activities will affect the following: New entrants into the industry: Are your business activities going to encourage or hamper the entry of new entrants into the liquor industry? Job creation: Are your business activities going to help create more jobs within the industry? Diversity of ownership within the liquor industry: Will your registration promote or restrict ownership concentration at vertical or horizontal levels of the industry? Efficiency of operation: Your expertise to run a business of this nature. Exports: Are your business activities going to encourage or hamper the exportation of liquor from the country? Here the applicant also needs to indicate the volume and type of liquor to be exported, if any. Competition within the industry: Indicate how your business activities will affect competition within the industry. The applicant should provide a list of competitors as well as their market share within a particular geographic market.

REQUIRED DOCUMENTS Applications should be accompanied by: A business zoning certificate for industrial purposes or a consent letter from the relevant municipality; A comprehensive written representation in support of the application; Any determination, consent approval or authority required by the Act; Valid proof that the prescribed application fee has been deposited in the bank account of the dti; A valid certified copy of ID or passport of the applicant; Trading business permit if the applicant is a foreigner; A South African Police Services (SAPS) police clearance certificate not older than three months from the date of issue; If the applicant is a juristic person, valid copies of registration issued by the Companies and Intellectual Property Commission (CIPC) or any other relevant registration authority indicating the financial interest of all members, shareholders, partners or beneficiaries as the case may be; A valid tax clearance certificate if the applicant is a juristic person issued by the South African Revenue Services (SARS) within 12 months from the date of application; and Verification certificate issued in terms of the B-BBEE Act. REGISTRATION FEE Once the final conditions of registration are imposed and before registration, the applicant will be required to pay a registration fee that correlates with the projected annual turnover. REGISTRATION CERTIFICATE A NLA 9 registration certificate will be issued to the applicant with the final conditions of registration. ANNUAL RENEWAL The registrant has to ensure that the registration is renewed annually and complete fully the form NLA 28 and pay the annual renewal fee. Renewal should be done a month before the expiry of the registration.

five billion litres of alcohol are consumed annually, which is higher than the global average.

One of our obligations is to ensure that the trade of regulated industries such as liquor, gambling and lottery, are regulated in a socially responsible manner. We want to see if we're winning the war against the social effects and abuse of liquor. We do not sufficient interventions for the trade. Zodwa Ntuli, DDG at the DTI

The draft National Liquor Policy proposes that The availability of liquor be reduced by regulating days and hours when liquor sales will be permitted in accordance with the National Liquor Norms and Standards; The national minimum legal age at which alcohol can be purchased and consumed be raised from 18 to twenty one 21 years; Liquor premises be located at least 500 meters away from schools, places of worship; recreation facilities, rehabilitation or retreat centres, residential areas and public institutions; The Minister of Trade and Industry determine the restrictions and parameters for advertising and marketing of liquor products. This includes the restriction of advertisement of the alcoholic beverages, prohibitions of sponsorship and promotion associated with alcoholic beverages;

Some of the recommendations include: Amending section 9 of The Act to allow for restriction of alcohol advertising; Setting up a government-managed fund to fight alcohol abuse; Introducing liability for manufacturers and suppliers to prevent alcohol supply to unlicensed traders; Regulating trading hours Increase the minimum legal age for drinking alcohol from 18 to 21 years Promoting education and awareness campaigns Harmonising provincial liquor laws with The Act Ensuring that three spheres of government work together to enforce regulations Enforcing regulations on illegal manufacturing of liquor

If the proposals are enacted, it will signal constraints, if not the end of our booze and braai culture, and the casual acceptance of drinking and driving. It will have a huge impact on major sports codes and teams, including for Bafana Bafana and the Proteas, who are supported by substantial sponsorships from SA Breweries (SAB) and others. Sporting codes stand to lose billions in alcohol sponsorships, which also extend to music and fashion. The proposals in the Liquor Policy Review, a discussion document, start with an attempt to restrict the sale of liquor to the youth by raising the legal age of access from 18 to 21. A crucial element is giving new powers to restrict advertising of alcohol and prohibit the promotion of liquor through sponsorships of sports teams and entertainment events. The proposals aim to crack down on thousands of unlicenced shebeens and taverns by punishing suppliers for enabling high levels of inebriation. An attempt to deter bar staff from serving customers who are already intoxicated is in the proposal, which threatens to hold bar workers, manufacturers, distributors and traders liable for any harm or damage if the drunken customer is involved in a car crash or crime. Proposals to restrict trading hours for liquor outlets aim to limit accessibility. Notably, the restrictions are intended to be uniform across the national, provincial and municipal jurisdictions. It is proposed that licences only be issued for outlets that are 500m from schools, churches, recreation facilities, residential areas and public institutions, or at buildings attached to petrol stations and public transport facilities.This applies to new licences, but it envisages that existing licences will be phased out within two years. The review says certain areas can be zoned or licenced for trading in liquor and entertainment, such as restaurant and bar strips in residential areas.

Some of the Objections and or Comments include:

The South African Liquor Industry is depicted by inequalities and inconsistencies, consequently giving rise to immeasurable informal liquor segments springing up, whereby such unlicensed and/or unregulated liquor outlets conduct trade and to date, continues to operate. As a result, on 30 September 2016 the final National Liquor Policy Review was published, supported by the Department of Trade and Industry. It deliberated and contemplated the development and trends of this Industry, through which recommendations for amendments to the current Liquor Policy was set forth and pronounced/advocated, while taking into account strides made since the inception and implementation of the current Legislation, addressing existing constraints and proposing operative and effective policies and procedures in and for this Industry.

In the wake of the above, the following amendments are contemplated by this Review Policy. Incrementing the national minimum Legal age at which a Major (person 18 and older) can purchase and consume alcohol from eighteen (18) to twenty one (21) years. Averting new Liquor premises and sale of such items, positioned within a 500m radius of schools, place of worship, recreation facilities, rehabilitation or treatment centres, residential and public areas, public institutions (which would include post offices) and no liquor licenses shall be made available to petrol stations, premises attached to such stations nor premises near public transport (such as airports). Throughout South Africa, homogeneous and systemising Liquor premises and sale opening hours, consequently restricting it to days and hours when liquor sales are sanctioned (legitimised). The limitation and regulation of alcohol advertisement and also the exclusion and proscription of such sponsorships and promotions. The regulation and broadcast of all alcohol televised and/or pre-recorded advertisements during the hours of 10:00pm to 6:00am.

Any form of advertisement idea, text, branding, though and/or composition of alcohol related products alluring and/or charming the Youth must be obscured and abolished. Alcohol Manufacturers and/or Distributors to be held legally responsible and liable for harm and/or damages caused by their/its Patrons if its found and proven that they excessively consumed their alcohol products and thereafter was involved in any form of crime and/or accident, causing harm to another and/or property, due to the effects of such consumed products. Any de facto liquor licence in effect and retained by any such Outlet, affected by the above Legislation will lose that licence within the next 2years. These amendments will have dire impact on responsible Consumers (Drinkers), Commerce and decimate Tourism within South Africa, which at the moment and due to the economic climate and recent downgrade, South African Commence cannot sustain. These amendments also negatively impact future growth of such Outlets and the Industry as a whole, which inevitably reverts back an

impact employment opportunities in such Industries, yet while affecting current Employee remuneration. Current Outlets situated within the 500m doctrine (as stated above) will have no other alternative than to either close their doors or relocate to remote locations, affecting their Client base, Client accessibility (restriction on movement and choice), growth and that of their Employees income and expenses. Through the implementation, into Law of these amendments it will open various unethical and unregulated doors for the growth and expansion of underground mentioned Outlets, where inflated and untaxed prices will be carried over to responsible and/or irresponsible Consumers, affecting all facets of life, yet not limited to the labour market and exploitation of Employees and as a result creating lawlessness amongst Consumers and Commerce, as there will be no safe nor regulated areas to exercise freedom of choice nor purchase and the consumption of alcohol. Contrary to the contemplation, exploitation and inevitably implementation of some of these amendments, the Department of Trade and Industry should convene and conduct intense discussions with all affected Stakeholders, deliberating and scrutinise that more effective and aggressively marketing be done, educating Consumers, Commerce and Tourist on responsible, safe and healthy drinking and making such affected Stakeholders aware of the dangers of ineffective alcohol consumption.

RASA Thanks YOU wendy@restaurant.org.za 0117052054