Government has decided to postpone the implementation of the 70 % alcohol levy to give stakeholders a chance to come up with alternative solutions to alcohol abuses that President Ian Khama has indicated he wants to resolve as a matter of urgency.
This past week, the leading brewer, Kgalagadi Breweries, together with other private sector stakeholders under the ambit of BOCCIM (Botswana Confederation of Commerce and Industry Manpower), started holding workshops aimed at coming at the National Alcohol Policy.
Sunday Standard has leant that, among other things, the Policy aims to assist government to come up with ways of implementing stricter penalties for people found abusing alcohol.
The Policy also aims to put into effect the implementation of already existing laws that were meant to reduce alcohol abuse but were never implemented.
“The public is hereby informed that Government has decided to postpone the imposition of the 70 percent levy on alcoholic beverages. This step is a result of a request by BOCCIM to be afforded an opportunity to make proposals on the problems of alcohol abuse in Botswana. Government has acceded to BOCCIM’s request in view of the importance it attaches to the role of the private sector as a partner in the Botswana economy.
“BOCCIM has been granted until the end of August 2008 to submit their proposals to government. After considering the proposals government will pronounce its final decision by the end of September. Government remains resolute in its determination to eradicate the problem of alcohol abuse in all its forms in Botswana,” reads a statement from the Office of the President.
The decision by government to postpone the implementation of the alcohol levy comes exactly a week after Kgalagadi Breweries submitted a gloom and glum technical report with the Office of the President spelling out the dangers of imposing the levy.
Among other things, KBL said the levy would destroy 42 000 lives who rely on alcohol industry for a living.
KBL further said if the levy was implemented they would have no choice but to close down their plant as it would no longer make commercial sense to operate from Botswana.
“There has been no consultation on this levy with the result that its implementation has been unexpected. Substantial losses are being realised as a result. We have to date committed in excess of P40 million in capital expenditure, an investment whose benefits and return on investment will not be realised,” said the KBL report to Government.
More importantly, KBL warned government of the levy’s unintended consequences.
“Abusive drinkers in the lower income population will spend a greater degree of disproportionate spend on alcohol beverages.”
“The social levy is predicated upon the belief that significantly increasing the price of alcohol will reduce consumption. History, on the contrary, teaches us that invariably this never works.”
Among other things, the report of which Sunday Standard is in possession of says that if the levy is introduced then KBL would have no choice but close down its plant in Broadhurst (Gaborone) because “the cost of production would outstrip profitability.”
