Judge rules on liquor licence chaos

The chaos around liquor licensing in South Africa has been brought into sharp focus by a ruling of the North Gauteng High Court that confirmed that the system of liquor licensing in the province was “dysfunctional”.

There is a “moratorium” on the issuing of new liquor licences in South Africa’s economic powerhouse which effectively makes nonsense of government policy on the development, regulation and management of the liquor retail industry.

In a statement today, the South African Breweries (SAB) said it had noted the decision by the North Gauteng high Court to maintain the current moratorium on the issuing of new liquor licenses in Gauteng.

In explaining its decision not to overturn the six-month moratorium, High Court Judge Matojane described the poor state of affairs at the Gauteng Liquor Board and its inability to fulfil its duties: “The urgent relief sought by the applicants will just exacerbate an already dysfunctional system of liquor licensing system without giving applicants any immediate meaningful relief.”

SAB Egoli Region general manager Leonard Volschenk, says: “We implore the relevant authorities to urgently review the current licensing regime. The current dysfunctional state is not only hurtful to industry, but also limits the amount of revenue the state is able to generate through taxing legitimate businesses, which it can ill afford in the current economic climate.

The liquor outlets, whose desire is to run businesses free from harassment by police and other authorities, are also being prejudiced by a state of disarray that isn’t of their own creation.”

Estimates by the Gauteng Liquor Board suggest some 15 000 permits have been issued by the board, while an additional 10 000 fraudulent permits may be circulating in the province. Volschenk says this situation is untenable.

As a matter of company policy and law, SAB is only permitted to sell liquor to licensed outlets. We adhere fully to this policy. But we are unfortunately unable to vet the validity of liquor licences that are presented to us before we agree to sell to an outlet. Only the Liquor Board is in a position to confirm whether a licence is valid and they have been unwilling to engage in a verification process.”

SAB says it remains committed to the partnership with the Department of Economic Development which was endorsed and announced by MEC Qedani Mahlangu in December 2010. A key aspect of the partnership included working together to verify the status of trading permits in Gauteng.

We are keen to work with the Department and the Liquor Board to share the information that we have and to work on collating a verifiable database. This would, however, be dependent on the Liquor Board putting in place robust processes and systems that would simplify the identification of fraudulently issued permits and allow for the culprits involved to be caught.

Unless the board is able to ensure the verification of licenses or assist industry players in doing so, all industry players are at risk of inadvertently selling liquor to holders of fraudulent permits,” Volschenk said.

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