Liquor Licence Renewal - The Gauteng Liquor Board has called on all Gauteng liquor licence holders to renew their licences. The liquor licence renewal period started on December 1 and licence holders are required to renew their licences. In terms of the Gauteng Liquor Act, licences are renewed annually. Liquor Licence Holders must ensure that they comply with the Gauteng Liquor Act because non-compliance is a punishable offence. The chief director of the liquor licensing office, said traders who continued trading without renewing their licences would be doing so illegally. Liquor Traders who trade without renewing their liquor licences, run the risk of having the businesses closed, their liquor confiscated and being prosecuted. The Liquor Board ensured that their office will be open during festive season to ensure that those liquor traders who want to renew their liquor licences can do so. Liquor Traders in Gauteng have been complaining for more than a year about the cumbersome renewal process which they have to follow when compared to other provinces. The following is a demonstration : Gauteng Liquor Licence Renewal - Collect Renewal Notice personally at Liquor Board - Make payment at FNB Branch - Present proof to Liquor Board Liquor Licence Renewal in most other SA Provinces - Renewal Notice Posted to Licence Holder - Pay per EFT - Keep proof of payment Liquor Traders say it is unreasonably time consuming and expense. (Article in New Age, Edited by LiquorWise)

When you decide to apply for a liquor licence be sure of the type of business you are going to open. There are different types of liquor licences and each one has their own conditions and regulations. In this article if the business owner has a Hotel Liquor Licence, this does not mean that he may manage a strip club within the Hotel. Visit our website if you have any liquor licence related queries! Two men were arrested for drug possession and another for operating an illegal strip club in Primrose, Ekurhuleni police said on Saturday. Inspector Mveli Nhlapo said police received a tip-off about suspicious activities at a hotel on Friday. "The 40-year-old owner of the hotel was arrested after he was found to be running an illegal strip club in the building," said Nhlapo. The other two men, aged 25 and 40, were found with cocaine and dagga. (Article by News24 – Edited by Liquorwisee)

Residents around Gauteng will be spoilt for choice as more township restaurants and other leisure establishments are going the legal route and improving their standards. The Gauteng Liquor Board said that it had noticed an increase of about 50% in the number of restaurants applying for liquor licences in townships like Soweto, Katlehong and Sharpeville. Monga Phaladi, secretary-general of South African Leisure Tourism & Hospitality, said that there was an increase in black people who were legalising their establishments. “Now black establishments want to be legalised and display their licences and health certificates so that they can benefit from tourism,” she said. Phaladi said that the legalisation of establishments led to professionalism and a higher quality of products on offer. She said Tiger Brands had offered cooking courses for a year to 10 emerging restaurants in Ekurhuleni, Tshwane and Johannesburg. Bally Chuene, chairperson of the Gauteng Liquor Board, said they had noted a increase in outlets in the townships. “Our inspectors went to see that equipment like stoves and proper kitchens are there,” he said. Chuene said that they conducted thorough inspections before granting licences. Phaladi called on the government to bring business to restaurants in townships. “We are grateful for the support and funding they give us, like the project with SA Tourism whereby they adopt and market a restaurant, but they need to start utilising township establishments themselves,” she said. Phaladi said that by using these establishments, the government would also be promoting tourism in that area. “Mainly restaurants in heritage sites benefit, but they can come to us and we will tell them about other places,” said Phaladi. (Article by The New Age – Edited by Liquorwise)

SAB, the South African subsidiary of SABMiller recorded good growth in emerging markets, but complains of the government dragging its heels to lift the Gauteng moratorium on new liquor licences. The would-be tavern owners will be hurt by the current moratorium on granting new liquor licences in Gauteng. Norman Adami, managing director and chairman of South African Breweries (SAB), said that the lack of capacity was frustrating. "We want to see a healthy industry that is normalised, but in order to have a healthy, normalised industry, you need to have an appropriate number of licences to serve the broader society," said Mr Adami. He compared South Africa to Poland and Colombia, which have similar figures for gross domestic product per capita and population size. Colombia has 480000 licensed liquor outlets and Poland more than 300000, but South Africa has only 60000, which suggests there could be as many as 180000 unlicensed outlets alongside the country’s legitimate resellers. "It’s very much a vestige of the past — an overhang from the Nationalist government," Mr Adami said. He added it was a form of "reverse discrimination", and that although SAB did not expect to sell any more or any less beer in the short to medium term as a result, the industry needed certainty to attract long-term investment. "The previous government tried to police the shebeens out of existence for 40 years without success. Why would this government be any different from the last?" he said. The global brewer expects emerging markets to account for most of its growth over the next few years. In the US and Europe, earnings before interest, tax, depreciation and amortisation moved down 6% in the period. "Within each business they are optimising their performance — we don’t foresee that in the next six months conditions are going to change materially, but we also believe emerging markets are going to perform and will be able to offset any temporary weakness," he said. In South Africa, the company increased revenues and profits, despite steady beer volumes and a fall of 3% in soft-drink sales. "We were very pleased with our performance given relatively soft economic conditions in South Africa with the consumer under pressure," Mr Adami said. "Castle Light performed particularly well selling at a premium price," he said. Analysts had expressed concern about whether margins in South Africa would hold, but Mr Adami said the company had been able to grow margins for the past two years. "The South African business reflects a consolidated margin of the beer, soft drinks and Appletizer business and our share of Distell . That would give a lower margin than the beer business," he said. (Business Day Article, edited by LiquorWise)

Some businesses has reacted with anger at the moratorium, calling it an exercise in futility. The MEC, Ms Mahlangu, said that her department now "had its house in order", but wanted to use its "new regime" to address the social and economic implications of liquor trading. The new system allowed for occasional and catering permits to be issued from 17 November and licensing renewals from 1 December 2011, but the moratorium on new licences would not be lifted. Businesses are saying that the Gauteng’s economic development department should have found a way to continue issuing licences while improving its systems as a lot of staff are sitting around, doing nothing." The CEO of the Federated Hospitality Association of SA, Brett Dungan, said the department should not have needed "to fix something that shouldn’t have been broken. Besides the loss of revenue for the hospitality industry, the moratorium had also been "massively inconvenient", he said. Ms Mahlangu said her department was also concerned about large retailers selling alcohol in traditionally black townships . When issuing new licences in townships for large retailers such as Spar , Pick n Pay and Woolworths, the department would "protect the interests of the small players out there", she said. "Why should we squeeze the small guy to give Woolworths a bigger margin?" she asked. However, she did not say how her department planned to do this. (Article by gernetzkyk@bdfm.co.za, edited by LiquorWise)

The Moratorium The moratorium (six month-ban) on the issuing of liquor licences in Gauteng was instituted unilaterally by MEC Mahlangu on 8 August 2011. Considering that Gauteng is the economic hub of South Africa (producing some 70% of its GDP), many businesses reacted to the news as an April’s Fool joke. They quickly realised that April had long gone! The province’s liquor board’s doors were shut to licence applications and according to Gauteng’s director of liquor Max Mothlake, they were to stay shut until well into 2012. Why a Moratorium? The Liquor Board wanted to use the moratorium to end the backlog of pending licence applications. The other big factor was that the corruption game at the board was fake licences. “If falsified licences weren’t being printed by corrupt staff internally they were being printed externally in collusion with staff members,” says Mothlake, who in March was charged with fixing the shambles. Reaction from Government MEC Mahlangu apologised for the “unforeseen” result of the moratorium on the Classic Government radio programme. She indicated that the necessity of the moratorium will be reviewed in October 2011. Reaction from Business Mr Brett Dungan(Fedhasa CEO) requested that burocratic hindrances be removed to allow business to grow. Less business activity means less tax, which impairs government (including The Liquor Board) from doing its job. Was (is) it Legal? The Application to Court Two separate applications were submitted and argued during September 2011 in the North Gauteng High Court in an effort to declare the moratorium illegal. Regrettably for business, they were unsuccessful by reason of technical legalities. However, this was enough to stop any further costly challenges by business. Effect on Business In General The applicants to court presented evidence of estimates that they will lose up to R350 000 per month due to the moratorium. This is due to the loss of liquor sales, as well as the public supporting licensed restaurants. The Moratorium has also brought development in Gauteng’s hospitality market to a halt. Sales of businesses involving liquor licences are frozen and opening of new establishments halted. Some active businesses have been waiting two years for their permanent licences. All functions requiring a temporary liquor licence (“occasional permit”) will not be able to serve liquor. Pretoria University’s annual spring day festival was cancelled because the organisers could not secure a liquor licence. Franchise Groups Keg Franchise - Food and restaurant franchise conglomerate Famous Brands’ efforts to revamp its Keg pub brand have been stymied by the Gauteng Liquor Board’s decision to freeze all new liquor licence applications until next year. Famous Brands bought 28 Keg and five McGinty’s franchised outlets from Kingco in late 2010 in a R27m deal that added a leisure component to the company’s mainly fast food offering. At the time Famous brands conceded the Keg brand needed “renovation and innovation”, but plans for a revamp have been put on hold. Famous Brands CEO Kevin Hedderwick says a newly re-branded Keg in Johannesburg’s northern suburbs, which is central to plans to convince franchise holders to convert to a new trading format, cannot open its doors until the board lifts the moratorium on applications for new liquor licences. Hedderwick says developments are most frustrating. “We’d love to show our franchisees how good the new look for the Keg is ... We wanted to show them where the new brand is headed.” Instead Famous Brands is lumped with a lease that has to be serviced and has incurred development costs with no way of generating cash flows. Hedderwick is hopeful the board will reopen applications in early February. However, the end of the moratorium in early February will begin with a phased reopening of licence applications — which means it might still be a long wait before first round is called in the new-look Keg. Spur Franchise group - “We planned to open up to 10 restaurants each with 60 staff before the end of the year,” says Spur Corp MD Pierre van Tonder. “Without liquor licences it’s impossible.” SAB Miller - Egoli region GM Leonard Volschenk says Gauteng liquor board estimates suggest there are 10000 fraudulent liquor licences in the province. About 15000 legitimate licences have been issued. Volschenk points to the problem SAB faces in supplying liquor outlets with suspect licences. “Only the liquor board [can] confirm whether a licence is valid and it has been unwilling to engage in a verification process,” he says. Some light on the Liquor Licensing Horizon ? The sixth-month liquor licence moratorium on temporary(occasional) liquor licences is to be lifted from 17 November. The moratorium on new liquor licences remains in place, economic development MEC Qedani Mahlangu told reporters on 15 November. She said stringent measures had been introduced to curb the issuing of fraudulent licences. The Moratorium had allowed the department to improve its efficiency and to solve problems relating to the liquor licensing process. These included the issuing of fraudulent documents. “Stringent measures have been introduced to curb the issuing of fraudulent licences [and] to date we are confident that no fraudulent licences have been issued,” Mahlangu said. The department was about halfway through dealing with a backlog of about 2450 applications. A new IT and business processing system had been designed to handle applications and would be in place for occasional and catering permits from Thursday. She said liquor licence renewals for 2011/12 would begin on 1 December 2011. Don’t get too excited Businesses hoping for normality to be restored next February 8 should prepare themselves for more frustration. The moratorium’s end will not result in the liquor board’s doors being opened in a business-as-usual way. It will be a phased reopening. “We don’t want to be flooded by an unmanageable volume of applications,” says Mothlake Have the floodgates been opened? The question on many people’s lips are whether the success enjoyed by the Gauteng Liquor Board now sets a precedent for any of the remaining 8 provinces to follow suit? The answer wasn’t long to be forthcoming – North West province announced a moratorium on tavern licence applications soon after the moratorium was unsuccessfully challenged in the Gauteng High Court. All have gone quiet from the other provinces for now, but don’t be surprised if the silence doesn’t last very long – the new Western Cape Liquor Act and the Kwazulu Natal Liquor Act will be implemented in 2012. Watch this space!

The sixth-month liquor licence moratorium on temporary(occasional) liquor licences will be lifted from 17 November. The moratorium on new liquor licences remains in place, economic development MEC Qedani Mahlangu told reporters on 15 November. She said stringent measures had been introduced to curb the issuing of fraudulent licences. The moratorium took effect in August to allow the department to improve its efficiency and to solve problems relating to the liquor licensing process. These included the issuing of fraudulent documents. The department was about halfway through dealing with a backlog of about 2450 applications. A new IT and business processing system had been designed to handle applications and would be in place for occasional and catering permits from Thursday. "Stringent measures have been introduced to curb the issuing of fraudulent licences [and] to date we are confident that no fraudulent licences have been issued," Mahlangu said. She said liquor licence renewals for 2011/12 would begin on December 1. (A News24 Article, edited by LiquorWise)

A spokesperson for the Gauteng Economic Development MEC, Qedani Mahlangu, at an Economic Development Portfolio Committee meeting in the Gauteng Legislature on Friday last week, let slip that the moratorium placed by the MEC on the issuing of liquor licenses, will be lifted ahead of the six months originally envisaged. All role players in the hospitality industry will welcome the end to this unpopular, unilateral and probably illegal ban. It will be a welcome boost for the tourism industry ahead of the December holiday period. We will have to wait to see which changes were implemented at the Liquor Board in order to stop corruption, which was one of the main reasons given for the announcement of the moratorium. We will have to see what the full details of the lifting of the moratorium are before getting overly optimistic. LiquorWise will keep the public up to date. Visit the LiquorWise Website - the most comprehensive liquor licensing website in South Africa (and more is still to come ..!!)

Food and restaurant franchise conglomerate Famous Brands’ efforts to revamp its Keg pub brand have been stymied by the Gauteng Liquor Board’s decision to freeze all new liquor licence applications until next year. Famous Brands bought 28 Keg and five McGinty’s franchised outlets from Kingco in late 2010 in a R27m deal that added a leisure component to the company’s mainly fast food offering. At the time Famous brands conceded the Keg brand needed “renovation and innovation”, but plans for a revamp have been put on hold. Famous Brands CEO Kevin Hedderwick says a newly re-branded Keg in Johannesburg’s northern suburbs, which is central to plans to convince franchise holders to convert to a new trading format, cannot open its doors until the board lifts the moratorium on applications for new liquor licences. Hedderwick says developments are most frustrating. “We’d love to show our franchisees how good the new look for the Keg is ... We wanted to show them where the new brand is headed.” Instead Famous Brands is lumped with a lease that has to be serviced and has incurred development costs with no way of generating cash flows. Hedderwick is hopeful the board will reopen applications in early February. However, the FM reported recently (Fox September 30) that the end of the moratorium in early February will begin with a phased reopening of licence applications — which means it might still be a long wait before first round is called in the new-look Keg. (Article by Marc Hasenfuss – Edited by Liquorwise)

The province’s liquor board’s doors are shut to licence applications and will stay shut until well into 2012, says Gauteng’s director of liquor Max Mothlake. Gauteng hospitality businesses seeking a liquor licence are in for a long wait. The province’s liquor board’s doors are shut to licence applications and will stay shut until well into 2012, says Gauteng’s director of liquor Max Mothlake. The hospitality sector is the victim of mismanagement at the liquor board, on which the auditor-general blew the whistle in 2010. Added was a liberal dose of corruption, which forced Gauteng economic development MEC Qedani Mahlangu to fire the board’s previous members and as from August 8 institue a moratorium for 6 months. This brought development in Gauteng’s hospitality market to a halt. Sales of businesses involving liquor licences are frozen and opening of new establishments halted. “We planned to open up to 10 restaurants each with 60 staff before the end of the year,” says Spur Corp MD Pierre van Tonder. “Without liquor licences it’s impossible.” High court judge Julius Matojane ruled against an application to overturn the licence moratorium. Expressing the sector’s frustration Van Tonder says: “Legitimate, job-creating businesses are punished because of illegal actions [at the liquor board]”. The corruption game at the board was fake licences. “If falsified licences weren’t being printed by corrupt staff internally they were being printed externally in collusion with staff members,” says Mothlake, who in March was charged with fixing the shambles. SAB Egoli region GM Leonard Volschenk says Gauteng liquor board estimates suggest there are 10000 fraudulent liquor licences in the province. About 15000 legitimate licences have been issued. Volschenk points to the problem SAB faces in supplying liquor outlets with suspect licences. “Only the liquor board [can] confirm whether a licence is valid and it has been unwilling to engage in a verification process,” he says. The chairperson of the Liquor Board said the an IT system is being installed, which would solve the problem of fake licences being issued. It would enable applications to be submitted online. Businesses hoping for normality to be restored next February 8 should prepare themselves for more frustration. The moratorium’s end will not result in the liquor board’s doors being opened in a business-as-usual way. It will be a phased reopening. “We don’t want to be flooded by an unmanageable volume of applications,” says Mothlake (Financial Mail article - Edited by LiquorWise)

Keg Franchise Roll Out Delayed

Famous Brands’ (the Food and restaurant franchise conglomerate) efforts to revamp its Keg pub brand have been delayed by the Gauteng Liquor Board’s decision to freeze all new liquor licence applications until February year.

Famous Brands bought 28 Keg and five McGinty’s franchised outlets from Kingco in late 2010 in a R27m deal that added a leisure component to the company’s mainly fast food offering. At the time Famous brands conceded the Keg brand needed “renovation and innovation”, but plans for a revamp have been put on hold.

Famous Brands CEO Kevin Hedderwick says a newly re-branded Keg in Johannesburg’s northern suburbs, which is central to plans to convince franchise holders to convert to a new trading format, cannot open its doors until the board lifts the moratorium on applications for new liquor licences. Hedderwick says developments are most frustrating. “We’d love to show our franchisees how good the new look for the Keg is ... We wanted to show them where the new brand is headed.” Instead Famous Brands is lumped with a lease that has to be serviced and has incurred development costs with no way of generating any cash flow.

Hedderwick is hopeful the board will reopen applications in early February.

However, the moratorium will only end in February and it is expected to be in a phased manner – the details of which are not yet know — which means it might still be a long wait before first round is called in the new-look Keg.

Financial Mail article (edited by LiquorWise)

Johannesburg - All liquor licences and permits in Gauteng will be reviewed, economic development MEC Qedani Mahlangu said on Tuesday. "I believe South Africans deserve better legislation," she told a media briefing on the draft liquor policy in Johannesburg.
"[It will] improve compliance through enhanced enforcement of the liquor legislative and regulatory."

There are 30 000 liquor licences in Gauteng.Mahlangu said her department would also look at discouraging the trading of alcohol on Sundays and religious holidays.
This would address the problem of unlimited access to and consumption of liquor."I'm talking about places like Pick n Pay and Spar or any takeaway place," she said.People would still be able to buy alcohol in restaurants, shebeens and taverns.

The Liquor Guide reported the following in its February 2011 newsletter (The heading above is not from the Liquor Guide article but chosen by Liquorwise) : Wherever liquor is available there will also be those who abuse it. Similarly, if there are those who abuse it, there are authorities trying to control the problem and devise a workable solution. The latest proposed measures by the local government do not necessarily provide the best course of action. The 2008 Western Cape Liquor Law Amendment Bill, which comes into force in September, seeks to tighten the regulations making it more difficult to acquire a licence to serve liquor. When commenting on the issue, SAB claimed that this could lead potential buyers to illegal liquor operations and also put a strain on the regulation of the industry. Brandhouse echoed their sentiments, "An inappropriate approach to alcohol may result in growth in black market trade in smuggled and counterfeit beverage alcohol." In Gauteng the obstacles faced by liquor retailers is no different, the local government is looking to ban liquor sales on Sundays. This they say would be in an effort to combat underage drinking. Although the 'solution' is different the results may be similar, with liquor consumers simply bypassing the law by heading to illegal liquor outfits on a Sunday or stocking up before the time. These proposed laws were drawn up with the best of intentions in mind, but also from a subjective perspective. Banning sales on a Sunday will only spawn new problems, as will tighter restrictions. The government, liquor manufacturers and liquor outlets need to come to an agreeable, workable solution. It will not be without compromise, but may be more productive than the constant back-and-forth between the two.