Gauteng fears monopoly in liquor trade

2012-03-04 18:21

Johannesburg - Shebeens must also comply with the new Gauteng Liquor Act, Economic Development MEC Qedani Mahlangu said on Sunday.

"It is critical that, as liquor traders, they must comply with the spirit and latter of the current legislation," she said during a media briefing on applications for new liquor licences and other liquor issues in Johannesburg.

She said shebeens currently fell outside the ambit of the existing legislation. However, the shebeen permits were due to expire at the end of June, around the time when the new legislation should come into operation.

"To this end, the shebeens will have a minimum period of three months commencing on July 1 to migrate into the current legislation by applying for any type of licence they deem appropriate for their business."

The department was in the process of amending the current Liquor Act.

"We envisaged that the new legislation will come into operation towards the end of the second quarter of the 2012/2013 financial year," Mahlangu said.

The current Gauteng Liquor Act of 2003 would be repealed and replaced by the new Gauteng Liquor Act.

Mahlangu said consideration would be given to traditional arrangements in relation to any application which would be outstanding on the coming into effect of the new Act.

No automatic renewal

"We wish to emphasise that there will not be an automatic renewal of licences as is currently the practice," she said.

In terms of the new legislation every licence must be awarded on an annual basis, the board must consider issues of compliance with licence conditions and the Act and it may also refuse to renew a licence.

Licences issued prior to the Act would be renewed subject to conditions of the new legislation, and there must be compliance with the broad-based black economic empowerment Act.

"The new legislation is going to be rigorous in its application."

The department introduced a moratorium on liquor licences in August last year in a move to curb problems faced by the industry.

During the moratorium the board was looking to address certain areas like curbing fraudulent issuing of licences, to afford the board sufficient time to deal with the backlog of applications, to introduce IT and business systems to improve the turnaround time of applications, to curb proliferation of liquor trading outlets in Gauteng and to improve the administration process.

"The moratorium has been lifted and the board is ready to deal with new applications," she said.


The backlog of applications dating back to 2006 has been eliminated.

Following the moratorium no officials were allowed to issue licences. Only the chairperson and the secretariat were allowed to do so.

Mahlangu said the department was concerned about the consequences of monopoly in the liquor trade.

"To this end the board has identified approximately 80 files which relate to monopoly in liquor trade."

She said this largely related to liquor licence applications of major retailers such as Woolworths, Checkers, Pick n Pay, Spar, Massmart and Liquor City.

"A framework agreement will soon be entered into between the two respective regulatory bodies."


She called fronting by large retailers unethical.

"These large retailers obtain liquor licences on the pretext of collaborating with previously disadvantaged persons for the advancement of black economic empowerment."

In the department's attempts to fight illegal liquor trade, it had since October 2011 shut down 126 illegal liquor outlets and seized liquor amounting to just over R1m.

"We will continue to conduct these operations rigorously to promote responsible liquor trade."

In an attempt to curb corruption within the liquor regulation system the department said a forensic audit was done which resulted in the suspension of five officials.

"A total of five liquor licensing officials have been suspended, and an additional four officials have been charged but not suspended."

Mahlangu said sites where alcohol was served on the premises must make facilities available for patrons.


These included separate entrances and bathrooms.

Under no circumstances must the family of the trader mix with patrons.

"The 500m radius rule is also not going to be relaxed at all," Mahlangu said about liquor outlets within a 500m radius of a school, church or mosque, which is currently forbidden by the law.

The department would put restrictions on noise levels of these businesses.

There would be no fines for a trader who defied the new Act - on their third warning the licence would be taken away.

"The penalty to take the licences away is severe enough," Mahlangu said.


Trading hours would be in line with the new Act.

Certain establishments would not be allowed to sell alcohol on Sunday.

This would apply to traders who only sell alcohol to take away, such as liquor stores and supermarkets, not institutions that serve alcohol for consumption on the premises, such as restaurants, she added.

Traders had a responsibiity to ensure their patrons behaved in a way that did not affect the rights of ordinary citizens who live near the outlets, she said.

She said with the new improved system it should take no longer than 90 days to apply for a liquor licence.

"Regulation of liquor trade in the province is of pivotal importance to the economic department and the Gauteng province."

Read more on:    qedani mahlangu  |  soweto  |  johannesburg  |  local government

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