LIQUOR BILL 2003 LIQUOR BILL 2003 PRESENTATION BY UNB CAPE TOWN 13 MAY 2003

1. LIQUOR BILL 2003LIQUOR BILL 2003PRESENTATION BY UNBCAPE TOWN13 MAY 2003

2. We have divided our presentation in following parts: 1. Sorghum beer - History 2. Sorghum beer - Today 3. Current status - Distribution - Licencing 4. Problems with current liquor bill 5. Our recommendations

3. Sorghum Beer - Brief History - It has been the traditional drink of Southern Africa for hundreds of years. • It is an integral part of South African cultural heritage and is a must at; • Marriages • Funerals • - Reconciliations • - Maturing to Adulthood ceremonies • - Child Birth Functions • - Thanksgivings • - Unveiling of Tombstones, etc.

4. - Sorghum Beer enjoyed a position of pride in the society. - The political environment suppressed Sorghum for many years - Organised commercial Sorghum industry has been declining since then. - Shebeens came into being to supplement survival for poor black families. - Most are run by women .

5. - Since early days when government controlled distribution of Sorghum these Shebeens have been illegal and constantly harassed. - Because of their inability to procure Sorghum Beer legally, they went for concoctions / alternatives - Wrong! Yes, but they must earn bread to survive and know no other way to make a living.

6. - Sorghum Beer is unique to Africa - Sustaining the future of Sorghum should be part of the African Renaissance

7. SORGHUM BEER – TODAYSORGHUM BEER -Unique and traditional sub-Saharan beverage. -Brewed with malted Sorghum and Maize grits. -Distributed,sold,transported,stored and consumed in actively fermenting stage. -Shelf life - 4 to 6 days, after which it is unfit for consumption.

8. - Opaque,viscous,sour and pinkish brown in color. - Alcohol content <3.2% - High nutritional value. Rich source of protein, carbohydrate,complex starch, Vitamins & Minerals. - Largely consumed in township, rural and informal settlements.

9. - Though a delicate product, can easily be made at homes/ Shebeens with easily available ingredients like Malt,Mealie-meal, bread etc. in small quantities. - Industrially brewed Sorghum beer is more hygienic and nutritious due to technology, proper equipment and rigid quality control in manufacturing and handling of beer.

10. SORGHUM BEER MARKET IN S.A MIO LITRES % - Total Sorghum beer sales/annum 1700 100 - Industrially brewed Sorghum beer 425 25 - Non- industrial Sorghum beer 1275 75 - Sorghum Beer from malt (85,000T) 1145 67 - Sorghum beer from beer powder (22000T) 130 8

11. - Sorghum beer market declining 5 - 6 % year on year. - 12 operating breweries and about 20 microbreweries. - Also brewed in about 100,000 shebeens / homes. - Consumers - Predominantly black, LSM 1- 4

12. CHALLENGES - DISTRIBUTON • - 4 - 6 Days Shelf life • Lack of infrastructure in informal market • Lack of access to banking channels & poor credit rating of most players • Security concerns • Lack of entrepreneurship • Low margin

14. SORGHUM BEER TRADE

15. INFORMAL TRADE SHEBEENS; SPAZAS; ZOZOS MONTHLY R500 R 3000 TURNOVER LITERACY LEVEL/ EDUCATION NEGLIGIBLE OUTLAY OF INFORMAL OUTLAY SECTION OF RESIDENCE SMALL EXTENSION [ZOZO]

16. DISTRIBUTION PATTERN

17. UNB’S DISTRIBUTION INFRASTRUCTURE • UNB has a fleet of around 500 vehicles, delivering about 90% of the total product to depots / distributors/retailers • UNB has about 60 depots • UNB employs 190 Driver Salesman • UNB continuously develops and provides financial support to small entrepreneurs

18. -Trade will come to standstill, if these facilities are withdrawn. Consumer will have no option but to switch to Homebrew, which as explained earlier is far less hygienic and at times dangerous.

19. BASIC PROBLEM • TREATING SORGHUM BEER AS ANY OTHER LIQUOR PRODUCT INSPITE OF FOLLOWING BASIC ISSUES: • Short shelf life • Current status of Sorghum traders • Unlicensable premises • Poor financial status • Past prosecutions • Complicated & expensive licensing process

20. PROVISIONS THAT CANNOT BE FOLLOWED • Separation of distribution from manufacturing (3 Tier) • Due to, • Short Shelf Life • Long Chain • Need of Fleet • Finance

21. Licensing Requirements: • Western Cape Govt. had acknowledged these facts and provided separate provisions in Green Paper. • Gauteng / E. Cape still proceeding treating Sorghum Beer as other Liquor product. • Other provinces may do so in absence of proper guidance in the matter in the National Bill.

22. RECOMMENDATION: Treat Sorghum Beer separately in the bill for: a) Licensing – Use simple permit system for distributor / retailers for next 10 years. b) Distribution - Do not prohibit manufacturer from distribution in view of shelf life and trading environment. Manufacturer should be allowed to distribute and condition of pre-invoicing be waved in view of its impracticability.

23. c) MICRO MANUFACTURER – Define qualifying volume. If qualifying volume is more than 100,000 lit. per annum, other Sorghum manufacturer should not be prohibited from operating Micro Manufacturing unit and licensing / registration should be required under National Bill.