A comparative study between tavern license holders and shebeen license holders in Yeoville

Abstract

This study primarily focused on the township segment of the liquor industry, and within the township, the research project focuses on the on-premise consumption channel. This segment is dependent on the route to market stakeholders (distributors and wholesalers) that are part of the value chain for supply. The distributors include big corporate outlets such as Makro and Ultra liquor or independent distributors. Taverns play a very critical role in the value chain, which is, where consumers come into contact with brands. This is referred to as the decisive moment for brands because at this point in the value chain, the consumers “vote with their wallets”. The biggest challenge for the industry about the township outlets is a lack of data to make strategic decisions. One of the key sources of information that allows suppliers to plan is the actual number of licensed outlets versus unlicensed ones. Type and size of outlets attract a different level of investment, to allow the industry players to be competitive. It is estimated that there are 64 000 licenced and between 180 000 and 250 000 unlicensed outlets in South Africa. Brewers and distillers of alcohol are prohibited by law to do business with unlicensed outlets. South African Breweries (SAB) has attempted to unlock the opportunity to do business with unlicensed taverns with their initiative to target the ‘bottom of pyramid’ programme called Mahlesedi. This was a tavernier training programme in collaboration with Gauteng Department of Economic Development (2019). The objectives of this programme were to support shebeen owners to apply for licenses, and to assist them with formalising their businesses by provide tools to run their businesses more efficiently. The introduction of shebeen permits by the Gauteng Provincial Government presented an opportunity for the brewers and distillers to expand their markets, hence they supported the implementation of this regulation. The permit system, however, presented challenges for the liquor industry and it was met with a lot of resistance from concerned stakeholders such as liquor traders, community social formations, and many other industry role-players. One example of such resistance resulted in the court case between Yeoville Bellevue Ratepayer's Association and Another versus the MEC for the Department of Economic Development in Gauteng Province (2019). This case highlighted the need investigate the differences between the licenced outlets versus those in operating with a permit. Typical questions include how different are these businesses? What is the real threat of shebeens with awarded shebeen licences? Lastly, is it the implications of the decision to terminate these permits to liquor suppliers? This study investigates these, and more, shebeen issues.