RESPONSIBLE TRADING

ARA HAS APPOINTED DR OSBORN MAHANJANA AS CEO Dr Osborn Mahanjana joins the Industry Association of Responsible Alcohol Use (ARA) after working as the director of corporate affairs and pricing at Eli Lilly Pharmaceutical, where he was responsible for the South Africa and Sub-Saharan region. His work at Eli Lilly Pharmaceutical involved overseeing government affairs, public policy and pricing. Donald Makhafola speaks to him about his new job and challenges faced by the country regarding alcohol abuse.We are making progress on a number into consideration such as illegal drugs of fronts and, as an example, one of our South Africa is one of the countries in the world with a high rate of alcohol abuse. Who do you think is usage, peer pressure, poverty and a lack of education. A distinction should be made between commercial alcohol which is regulated and non-commercial, partners is the Foundation for Related Alcohol Research (FARR). Its primary objective is to reduce the prevalence of fetal alcohol syndrome in South Africa. to be blamed for this scourge? or moonshine alcohol, which is not As a result, the rate of fetal alcohol regulated. Alcohol that has been brewed syndrome has reduced in De Aar in the

Alcohol abuse is a multi-faceted issue at home can contain ingredients that are Northern Cape specifically by 30 percent and it is unrealistic to believe that any not fit for human consumption and can since 1997. Based on these results FARR one could be blamed for the misuse and have severe health effects. continues to extend its programmes to abuse of alcohol. The alcohol abuse rate include other areas in the Northern and in this country is unacceptable, which Alcohol companies and society Western Cape. is why the ARA and its members are committed to reducing alcohol-related harm and promoting the responsible use of alcohol. Targeted interventions hold great promise in educating consumers based organisations like ARA are continually promoting responsible drinking. What do think it would take for the message to get through Are you satisfied with the way alcohol is marketed or advertised in the country? and changing behaviours that harm to alcohol users? The ARA and its members prescribe to a individuals and society. By targeted code of conduct that outlines what the interventions, we refer to alcohol It is estimated that 35 percent of South industry can and cannot do in respect misuse and abuse affecting specific Africans consume alcohol and only eight of alcohol advertising. This code of communities, specific user groups and percent of South Africans that do drink conduct is based on international best at risk groups such as the youth. The are regarded as risky drinkers. This is practice. The goal of advertising is to

ARA also believes that additional social the area of the population that we need capture the largest possible proportion and economic factors should be taken to target through proper interventions. of the business of those over the legal

drinking age who have already made the choice to drink. Advertising has a measurable effect on market share for particular brands and substitution between brands. We are confident that the way alcohol is advertised is suitable for the audience that is intended to receive it. However, due to alcohol’s potential for harm if misused, the marketing of alcohol beverages requires careful attention. This is why industry self-regulation, through which it is responsible for monitoring and enforcing its own conduct around the marketing of its products, can be an effective approach to ensuring responsible marketing.

Government believe liquor advertising is the reason the country has a high rate of alcoholism. What is your personal view?

The Control of Marketing of Alcohol Bill, as it stands, will not be successful in reducing the level of alcohol abuse in South Africa as there is no silver bullet approach to reducing the misuse and abuse of alcohol. This will continue to be a focus area for the ARA as we would like to work closely with government to shape this piece of legislation. The Bill has to date not been shared with the industry or been made public, but it is anticipated that it will have numerous economic effects on the country and various industries, making it imperative that we properly engage with all relevant stakeholders.

If government can get its way and pass the controversial Bill to restrict liquor advertising, what social implications do you think this would have on our society?

Advertising has not been shown to increase aggregate consumption by adults or young people and a causal link has not been established between alcohol advertising and harmful or excessive drinking patterns and resulting problems. If liquor advertising is restricted, consumer choice reduces. An advertising ban would reduce competition and freeze market shares of existing brands and prevent new entrants to the market. The result will be a loss of jobs and a negative effect on the GDP.

As you take over the position of CEO, what is your main goal in this organisation and what challenges do you anticipate?

As the new CEO of ARA, I will continue to drive interventions to reduce alcoholrelated harm through combating the misuse and abuse of alcohol beverages and promoting only the responsible use thereof. I am proud to say that ARA has successfully lived up to its mission and will continue to do so through its ongoing efforts. Maintaining our role as a self-regulated entity will continue to be a challenge as we are starting to see the introduction of legislation that limits our ability to do this, such as the right to market. It is however an exciting time for me to join the ARA and we aim to engage with all stakeholders in a meaningful way.

Distributors of alcohol play such an important role when it comes to responsible alcohol use as they are the point of sale. They decide to actively prevent alcohol abuse and can do so in a number of ways:

• Stick to the by-laws by keeping noise levels down and not selling alcohol after the prescribed time • Don’t allow criminal, disorderly or offensive behaviour to take place on their premises

• Do not serve visibly intoxicated people

• Do not serve pregnant women

• Always ask for ID, especially when dealing with younger looking customers

• Conduct responsible promotions that don’t encourage people to drink too much

• Assist people who have over indulged with getting home safely

• Having non-alcoholic drinks and food available at the premises

According to research released by Econometrix in June last year, the potential economic impact as a result is:

• GDP: The total annual impact (including the multiplier impact) is estimated at – R7.412 billion in 2011 prices or a reduction of 0.28 percent of GDP. For every R1 expenditure loss, the impact on the GDP will be a loss of -R1.69

• Employment: The total impact on employment is estimated at 11 954 jobs. Of the total, -2 573 will be highly skilled, -5 288 skilled and -2 779 semi-skilled and unskilled jobs

• Fiscus: Total tax income will decrease with R1 783 million

• Trade: Exports decrease of R225 million and imports decrease of R304 million