Post date: Nov 14, 2013 6:4:2 PM
South Africa has a proposed a bill that could see alcohol advertising being banned. Advertising agencies say the bill could threaten the industry's survival and the economy with thousands of job losses.
JOHANNESBURG, SOUTH AFRICA (REUTERS) - Festus Masekwameng and his team of young advertisers are worried about the future of their company Mojo Mother Russai --following the recent introduction of a proposed bill banning alcohol advertising.
One of the proposals in the bill is a complete ban any form of alcohol advertising, which Masekwameng like many in the advertising industry fears could have far reaching implications on small businesses like theirs.According to the South African health ministry, alcohol abuse kills around 130 South Africans a year and costs the country's economy about R 38 billion (3.6 billion USD) a year.
Authorities say banning liquor advertising will curb irresponsible drinking among both adults and the youth.
But Masekwameng argues that the bill, if passed will hurt the economy and contribute to loss of jobs, rather than changing people's attitudes.
"Part of the portion we handle as a company is doing a lot of campaigns on responsible drinking. So we don't know if the ban is supposed to affect responsible drinking advertising as well. But I thing in general for the industry is gonna be a big blow because there are too many companies that rely on that support to be able to employ people to be able to make an impact in the economy," he said.
Liquor contributes between 25 and 30 percent of the revenue in the advertising industry. Should the ban go ahead it could result in the closure of smaller advertising companies.
Experts warn that the prohibition of alcohol advertising alone will not lead to a decrease in alcohol consumption.
According to economic data analyst company, Econometrix, in a study commissioned by theIndustry Association fro Responsible Alcohol Use, the ban would have little impact on drinking.
Most of the alcohol consumed in South Africa is distributed through liquor outlets operating in the informal sector, which make up a significant proportion of people that fall outside the advertising spectrum.
"We actually looked at advertising per capita and compared that with consumption per capita, and we found that there was very little statistical relationship between the two. In other words the impact of that, was actually to ban alcohol advertising is not going to make a significant difference to the actual consumption of the alcohol and certainly not on the abuse," said economist Rob Jeffrey.
In bars around the commercial capital Johannesburg, reactions on the proposed bill were mixed.
"Even if they stop liquor adverts, it's all the same because from a long time ago, women could brew alcohol so that people can drink," said Soweto resident, Amon Ngobeni.
"I think a few people that are irresponsible drinkers make such a impact that it makes the government scared to advertise thinking it's gonna do a major difference," said Ricardo Herner, aJohannesburg resident.
While the ban may not stop people from drinking, Jeffrey believes it will have a negative impact on the economy.
"The impact on the GDP, is of the order of 7.4 billion, it will reduce GDP by that. It will reduce employment by approximately 12 000 people. When you recognise that we have a dependency ratio in this country of 4 to 1, that's 50 000 people who would not have a form of livelihood. It does have significant impact," he said.
But it's not just the economy that may be affected by the ban.
The bill also threatens the sport industry, where a whopping R4.3 billion would be lost in advertising expenditure and sponsorships, affecting national sport teams, who benefit around a R300 million a year from sponsors.