Liquor Bill: response by Department

Meeting report

TRADE AND INDUSTRY PORTFOLIO COMMITTEE
21 May 2003
LIQUOR BILL: RESPONSE BY DEPARTMENT

Chairperson:

Briefing by Director-General

SUMMARY
The Department of Trade and Industry responded to issues raised at the Liquor Bill hearings held the previous week. The main issues that were raised were the proposed three-tier system and various concerns around public interest. The Director General requested that the Department be allowed to go back and amend certain clauses of the Bill and then report back to the Committee, which was accepted by the Committee.

MINUTES
The Chair explained that the meeting was a follow up after the hearings on the Liquor Bill. The DTI would respond to issues raised at the hearings and a decision could be made on the way forward.

Dr Alistair Ruiters: Director General, pointed out that the primary objectives of the Bill was to restructure the liquor industry and to address the socio-economic cost of alcohol abuse. It was important to note that the apartheid government had used liquor and liquor legislation to control and exploit the masses. The three-tier system was there to control the industry, to prevent domination by huge companies and to encourage BEE by bringing in new entrants. He suggested that the DTI be given time to refine the Bill further and then bring it back to the Committee.

The Chair said that he welcomed the points about public interest as raised by Dr Ruiters. He suggested that garages also be included in the public interest where churches and schools were mentioned. The three-tier system was a flexible one and was enforced in the Constitutional Court judgment. He suggested to the Committee that the DG's proposal be accepted and that the DTI come back to them with an revised Bill. He added that they were not hearing from other sectors of the public concerning the abuse of alcohol. Labour should also be drawn into consultation about the Bill. The unregulated sector should be drawn into the industry in line with the norms and standards set in the Bill. Provincial and national processes should happen in tandem. However, he was not sure about the process at provincial level. He suggested that the NCOP convene a workshop to find out the position of provinces.

Mr Lowe (DA) asked what Dr Ruiters' view was of the powers given to the Minister to override legislation, as outlined in the Bill. He said that it was his party's feeling that the Bill focused on provincial and local competencies.

Ms September (ANC) said that her party supported the outline of the Bill. A solution should be sought and the Bill should not be abandoned. She asked whether the time for submissions was over or whether they could still call for submissions since the religious community had not been heard.

Prof Turok (ANC) said that if the Bill was handed over to provincial and local authorities, it was a recipe for chaos as each one would have different laws.

Mr Lowe said that local authorities should decide what they want for their area.

Ms Moloi (ANC) said that the Bill must not be passed to the provinces as it was the Committee's responsibility.

Mr Rasmeni (ANC) said that national standards had to be set through the Bill.

Ms September said that a developmental approach towards the Bill would be preferred. The Minister should enable the Bill to pass and not discard it. There was a need to regulate the industry at national level.

Mr Lockey (ANC) said that the Bill must be referred back to the Department again. The Minister's discretion should be more proscribed and not absolute. The exception should, however, be made in the sorghum beer industry where the Minister should be given the power to decide if a manufacturer could be a distributor.

In his response, Dr Ruiters said that the state made no apology for dealing with issues of equity and development in the Bill. It realized that the industry was important and had attained international success, but it was important that a balance be maintained. The Minister must have some discretion as he had a responsibility towards the public. The poor, vulnerable and youth, who were all at risk because of alcohol abuse, needed intervention by the state. There had been long discussion about the power of the provinces and whether some powers had to be transferred to them. It important however to have unity and uniformity. The industry had actually suggested that it would be better to have the Bill as is instead of nine different pieces of legislation, as many manufacturers trade across provincial boundaries.

The Chair said that for local communities to take decisions was fine in principle, but was difficult in practice. The Committee was open to more submissions although it would not advertise again. They were not formally open to public hearings. He regretted that religious communities and researchers into alcohol abuse had not made submissions. The Bill was now in the hands of the DTI, but if they were approached, they might entertain a presentation. This would also depend on the DTI. He then continued to point out certain technicalities that were of concern in the Bill:
-The definition of a person was not clear. It did not state whether a trust was included. It was not clear whether a person or the premises was registered.
-The Bill stated that alcohol could not be sold to a minor, but did not cover supplying alcohol to them.
-The clauses around public transport were too wide.
-The inspection of certificates was not clear. It was not clear whether one could inspect it direct from a person or the government.
-There was an anomaly around micromanufacturers who could sell to liquor sellers, yet it stated that a liquor seller could only buy from distributors.

Mr J Strydom (DTI) responded that they had had a meeting with the state law advisors to see what possibilities there were. One possibility was that the Minister withdraw the Bill and it be redrafted. This seemed unlikely in the light of the above discussion. The other possibility was that the DTI consider a redraft by way of formal amendments. For substantial amendments, more time would be needed. The most substantial changes would be to Clause 12 and 24 (5) which dealt with the three-tier system. He explained that there were a number of possibilities:
-There could either be three tiers with no movement between tiers.
-There could be three tiers with movement or a system in which the Minister could make changes. -This was the one proposed in Clause 24 (5).
-The other possibility was to have the three tiers with the Minister having the sole prerogative to decide terms and conditions. There would also need to be changes made to Clauses 12, 24, 25, 26 and 27. The issues around default legislation were always emotive one.
He said that it might be necessary to consider this issue or beef up the norms and standards which apply. According to Clause 57, the 1989 Act would be in force even once the new act was passed. It would only come into force once the provinces brought in new provincial laws.

Mr Lowe asked when the Department would return with amendments. He suggested that the DTI consider the Free Market Foundation's considerations that some issues be the responsibility of other Departments. He suggested that because there were so many amendments, the Bill be withdrawn.

The DG said that they would try to complete it as soon as possible, but he thought it would take at least three weeks to complete the amendments.

The Chair said that this Bill was following the process of all other Bills. The Committee would decide which players to consult.

Prof Turok said that this process would be more democratic than that which the DA was suggesting.

Ms Ntuli said that every submission was important, not just the Free Market Foundation's.

The Chair then closed discussion around the Bill.

He called on Members to volunteer or nominate Members to serve on the sub-committee relating to informal traders as suggested at the meeting the previous day. Prof Turok and Ms Moloi were chosen. The Chair also explained that he had received an anonymous e-mail from employees at Ntsika complaining about management. He informed the Committee that he had written a letter to the management of Ntsika.

The meeting was adjourned.