The Executive Director of BOCCIM, Maria Machailo-Ellis, has endorsed the Ministry of Trade and Industry’s liquor trade regulations stating that the government is “only carrying out the responsibility that any government would take given the current irresponsible use of liquor which results in car accidents and, in some instances, breaking down of families. What government wants to achieve is in line with the tenets of Vision 2016.”
In response to the question of whether the regulations make good business sense, Machailo-Ellis said that the decision to introduce them was taken “from a moral point of view to address social challenges brought about by irresponsible consumption of alcohol.”
Owing to the fact that the new regulations would affect their bottom line, the resuscitated Liquor Traders Association (LTA) which has members countrywide, has accused the trade ministry of acting in haste. At the instance and insistence of parliament, the government carried out a consultation process by way of kgotla meetings. A majority of those who got to speak at those meetings endorsed government’s plans but LTA expressed disappointment with the whole process, saying the kgotla is not a forum where people can disagree with what leaders say.
For her part, Machailo-Ellis sees nothing wrong with the manner in which the government handled this particular aspect of the issue.
“Numerous consultations have been conducted over the years in an attempt to find ways of effecting the regulations. There has not been a better idea or suggestion on how this can be better handled and the way it is being done now appears to be the best way,” she says.
One point that has been consistently made by LTA is that the government itself will suffer financial loss as it has also invested in liquor trade through its shareholding in Kgalagadi Breweries Limited and financing of CEDA businesses that trade in alcohol.
CEDA public relations manager, Oabile Regoeng, says that they have indeed financed some liquor trade enterprises but long stopped doing so. The decision was taken long before the liquor trade regulations were even mooted.
“It was a purely business decision that had nothing to do with the liquor law. We realised that the market was overtraded, especially along the railway line,” Regoeng says.
CEDA did not finance bars or bottle stores but gastropubs and nightclubs. Regoeng says that only “one or two” beneficiaries of the latter still owe CEDA.
One such is Daniel Lesiapeto who secured a CEDA loan in December 2004 to start a nightclub in Paje, a small village outside Serowe. He is supposed to have paid the loan off by 2009 but he says that is going to be extremely difficult and that he may have to use his personal funds to get out of this debt.
The one main worry that nightclub owners have expressed is that they cannot do profitable business if their establishments have to close at midnight as the regulations require.
“Seriously, who’s going to come to a club at eight? People come to a club at 12 after bars close,” Lesiapeto says.
According to another entertainment entrepreneur, Soares Katumbela, night club business picks up by about 60 percent after midnight. And there is good money in the business, he reveals.
LTA’s chairperson, John Kula, who is a professionally qualified flying instructor, says that he used profits from his bars to buy aeroplanes and start a flying school at Sir Seretse Khama International Airport.
Machailo-Ellis says that at this stage one cannot be sure whether KBL or CEDA-funded businesses stand to lose.
“Although there is a prima facie possibility for possible losses, it has
been shown that even if luxury items such as alcohol and cigarettes are heavily taxed or regulated, consumers still buy them. We believe that business will initially continue with some adjustment constraints but ultimately business will run as usual within the constraints of the law,” the BOCCIM head says.