Saturday, May 25, 2024

Khama, KBL fight over alcohol levy


A war of words has erupted between the Government and Kgalagadi Breweries following a government decision to introduce a 30% levy on all alcoholic beverages, effective October1, 2008.
While Government says the decision is a product of proposals submitted by the private sector on behalf of the alcohol industry, Kgalagadi Breweries maintains the whole thing smacks of a government snub, as the levy was never a part of the proposals.

So strong and sudden has been the KBL response to the announcement that the corporation just fell short of accusing the government of engaging in spin.
On Friday, the government announced as its “final decision” the implementation of a 30% levy.

The “final decision” is lower than 70% initially proposed by President Ian Khama.
Also announced is the government intention to appoint an implementation committee.

“We have received with shock and disappointment the resolve of government to proceed with the alcoholic beverages levy, albeit at a lower level of 30%. We note that Government has somewhat reconsidered its position. Notwithstanding, we remain resolute in our view that the levy in whatever form, shape or magnitude will not resolve the problem of alcohol abuse,” KBL said in response to government decision.

In fact, the brewer says government decision amounts to a total rejection of the proposals the private sector submitted to government under the auspices of BOCCIM (Botswana Confederation of Commerce Industry and Manpower), chief of which was the immediate setting up of a P20 million fund that would help mitigate the harmful effects of alcohol consumption.
Under this arrangement, KBL had committed P13 million to kick-start the fund.

“Regrettably, we have been informed that government has not accepted our proposal and has instead reverted to a levy of significant proportions at 30%. We are concerned about this and the stated threat of a possible increase in the levy.”

KBL says the levy of any amount carries with it significant social and economic consequences, including but not limited to loss of jobs, losses on the Botswana Stock Exchange, negative impact on inflation, illegal cross-border smuggling of alcohol, the production and sale of potentially harmful illicit and counterfeit products as well as other associated crimes while still not addressing the noble aim of reducing alcohol abuse.

In a somewhat veiled threat, KBL maintains that not only is the decision to introduce the levy unsustainable in the long term, there also are human rights connotations attached as well since the government’s decision effectively denies the people a right to choose.

“While we know that our beer adds to the enjoyment of life for the overwhelming majority of our consumers, we believe that alcohol consumption is for adults and is a matter of individual judgment and accountability.”
On that note, KBL says the best route to take is the adoption of a National Alcohol Policy, which provides a framework within which Government and key stakeholders can develop “targeted alcohol action plans in the best interests of all the people of Botswana.”

Central to KBL’s rejection of any kind of levy, however small, is research that by any form, shape or magnitude the levy will not bring about any solutions, but only serve to exacerbate the problem.

“A whole body of evidence points out that while increasing the price of alcohol may limit its purchase by some people it does not address the most pertinent matter of alcohol abuse and its associated harms.”

Asked on why government decided to maintain the levy even as it was not part of the BOCCIM proposal, Presidential aide, Dr. Jeff Ramsay said Government is adopting a holistic approach.

“We retain the levy because we are of the view that together with the Policy this would be a holistic approach,” said Ramsay.

More importantly, Ramsay points out that the decision to reduce the levy from 70%, as initially suggested by government, to 30% should not be interpreted as a weakness.

Ironically, while KBL thinks by introducing the levy government has effectively rejected the proposals as submitted by the alcohol industry, government, on the other hand, maintains that they have “accepted” measures as proposed by BOCCIM.
“These measures include the adoption of a National Policy on Alcohol, public education campaigns on the dangers of excessive alcohol consumption, and stiffer penalties for alcohol related offences as well as the monitoring of the implementation of the programmes.”


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