State’s alcohol ad ban?under wraps

2013-09-29 14:01

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Department of health spokesperson Joe Maila says there is no particular reason for delay, just that it is a process

Despite a year of lobbying, a comprehensive ban on all forms of alcohol advertising and sponsorship could get rubber-stamped this week.

The lobbying has not led to any “substantial changes” to the bill to ban alcohol advertising since a leaked draft sparked panic in the industry almost 18 months ago.

That means a comprehensive ban not only of roughly R1.8?billion in annual mass media and public advertising, but also of sport and cultural sponsorships and the “below-the-line” marketing that actually constitutes larger sums of money.

The alcohol industry is still waiting with bated breath for the department of health to actually unveil the Control of Marketing of Alcohol Beverages Bill, according to Michael Mabasa, the spokesperson for their chief lobby group, the Association for Responsible Alcohol Use (ARA).

The bill was approved by Cabinet earlier this month, but remains ungazetted. It will force all three local broadcasters and all three major sporting codes (soccer, rugby and cricket) to scramble for new advertisers and sponsors.

“We haven’t seen it and the industry has not even given input. We only have the public pronouncements to go on,” said Mabasa.

Department of health spokesperson Joe Maila said: “If we had seen the bill, we could make counterproposals. There’s no particular reason for the delay, it’s just process.”

He told City Press earlier in the week the bill would be in the Government Gazette by Friday.

Now the final bill is only likely to be published this coming week.

The Medical Research Council’s Professor Charles Parry said: “There are changes – but not substantial changes as regards the intention to ban alcohol advertising.”

His unit at the council conducted part of the regulatory impact assessment on the bill, specifically to look at evidence around advertising bans in other countries.

Parry further said: “The bill is likely to propose banning both above- and below-the-line advertising, as it would not make sense to only ban one.”

The ARA this year commissioned a lengthy report from consultancy Econometrix on the economic impact of the ban, as described in the leaked draft.

Its headline figure for alcohol companies’ spending on advertising was R4.4?billion a year.

This comprises about R1.8?billion in above-the-line mass media advertising and another R2.6?billion in below-the-line expenditure and sponsorships.

These figures are disputed, especially the assumption that no one will take over the prime advertising spots and sponsorships vacated by alcohol brands.

The health department has conducted a regulatory impact assessment, but it is unclear whether that report will be made public.

In her speech announcing the bill, Social Development Minister Bathabile Dlamini made no mention of any potential economic effect outside tax revenue.

If the ban actually works and reduces alcohol sales, the lost sin taxes will pale in comparison to the estimated costs of alcohol abuse of about R38?billion a year, she said.


The companies most likely to suffer from an alcohol advertising ban are the broadcasters, especially the SABC, followed by Multichoice and then, according to the Econometrix report.

The three of them account for the vast majority of advertising expenditure by SABMiller, Distell and Brandhouse, the country’s three overwhelmingly dominant alcohol companies.

The SABC would need to replace about 15% of its TV advertising revenue as alcohol contributed about R515?million of the R3.38?billion total last year.

Multichoice stands to lose about R550?million in revenue while could lose about R270?million, the Econometrix report estimated.

That’s already more than two- thirds of the total mass media advertising done by the industry.

The end of alcohol advertising will undoubtedly affect the country’s total adspend, although the doomsday scenarios are very possibly overblown.

This was according to Johanna McDowell, the managing director of Independent Agency Search, a company that facilitates corporate clients’ appointment and use of advertising agencies.

Alcohol contributes about 5.3% of all mass media advertising in South Africa. “It will be fascinating to see the effect. Everyone is predicting doom and gloom, like when cigarette ads were banned,” said McDowell.

But any number of trends may counteract the lost expenditure – from rising advertising by other products to the shifting of alcohol marketing budgets to the rest of Africa – which would probably still mean business for South African agencies and advertising producers, says McDowell.

There are waiting lists for prime advertising spots and there is very little danger that alcohol brands won’t be replaced by other advertisers, she says.

“The country’s cinemas will lose advertising and outdoor advertising will be affected, but not that dramatically.

“People get creative when they need to get around rules,” says McDowell.

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