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Advertising opinion

The opportunities in the alcohol advertising ban

It's obvious that banning alcohol promotion won't stop people from drinking but it's also abundantly clear that the social cost of alcohol abuse is much more than society can afford.

(Image: JD, via Wikimedia Commons)
Despite the stats from the alcohol lobby that says that of all drinkers only 8% abuse alcohol. The social cost is too high for society and instead of fighting the government, the alcohol industry should be looking at helping society to recover from the heavy impact of alcohol abuse.

Pros and cons of the ban:

This article is not about the pros and cons; it's about what would be good for everybody involved and how the alcohol lobby can respond to the inevitability of the alcohol and sponsorship restriction bill. I have compiled what the main arguments are for each side:

Alcohol Lobby Business and affected partiesGovt and Society
R7.4bn loss to the SA GDPR38bn annual cost of alcohol abuse (R240bn - intangible costs)
12,000 possible job losses.70% of reported domestic violence in 2008 involved alcohol.
R700m loss in Sponsorships in 2014: Team sports will lose out on billions in sponsorships. (cricket, soccer and rugby etc)High prevalence of alcohol in high number of death and disability stats. (Alcohol is the third leading risk factor for death and disability in the country and was responsible for around 130 deaths every day.)
Universal truth: People will consume alcohol anyway despite the ban.Universal truth: A world with less alcohol abuse would be better for all.


What should the alcohol industry do?

If I were CEO at SA Brewers or Distell, I'd say to my marketing team "The ban is inevitable, you are now our Intermediary Development division; you keep your budget only the strategy is "growth through others"

This is the story, I would outline to them: What the alcohol advertising ban means for Joe's pub?

"Joe's pub is based in Alexandra; he attracts large crowds over the weekend. His capacity has topped out; he can only host about 100 people but caters for more than 300 people who end up standing in the streets and bringing in alcohol. Joe could be selling more alcohol but he is constrained by the space for seating and stock purposes. He also doesn't have card facilities, and this leads to delayed or lost sales. He also needs business advice and various services like accounting, marketing, and business strategy in order to grow the business.

"All the brands that Joe deals with must have supported him to the tune of R200,000 in advertising, event and marketing support, but this has done little to grow his business and prepare him for growth and to be a greater contributor to these brands bottom lines.

"As SA Brewers and other distributors we have built up a substantial amount of knowledge and experience in the power of marketing, business and brand building. Ladies and Gentlemen from tomorrow your job is to help Joe grow his business in a sustainable and scalable manner."

The numbers: Advertising spend:

Top 3 Brewers (SAB, Distell & Brand house) spent around R1.5bn in advertising in 2012 in the wake of the coming legislation on restricting alcohol marketing and sponsorship this can become a big supply development opportunity. The distributor and the liquor outlets will become the battle grounds of the alcohol sales contest but more importantly these outlets are direct lever on increasing sales and product consumption. The value of branding isn't in the sticking of logos on things; the true value of branding is its impact.

The ban is inevitable:

On 18 September 2013, the South African Government Cabinet approved the Control of Marketing of Alcohol Beverages Bill. Ideally the alcohol ban means that knowledge that has been developed over the years can now be converted into supplier development instead of wasting money of lobbying misadventures. Regardless of what we think about the "Restriction on Alcohol and sponsorship bill" will happen the key question is what the affected parties will do in this regard.

What should business do?

In the current format, marketing for brewers and sponsorships does a single brand job, i.e. Hansa Pilsner sponsors an event. Castle sponsors rugby. An advertising campaign for brand X and so on. This brand focus is then driven into the distributors, liquor outlets, various sporting and entertainment events etc. The process above is one that is driven by the basic impetus: sales (individual brand sales), but this game won't wash in the new reality. So let's assess what happens with the ban:

Sales: The industry will be restricted in the communication efforts in advertising and sponsorship but the need to sell does not go away.
Skills: The business need for marketing and sponsorship is by and large not lost, those skills still exist to implement and to build alternative "marketing activity"
Resellers: The need to find more business clients still exists. People who can buy serve our clients with our products are still needed.

The new approach:

This strategy has two objectives; 1.Grow sales in a sustainable manner and 2. Build Social capital. This is how:

1. Grow sales:

Develop arm of new arm in brewery business the "Intermediary Development" Department. Develop a business capacity to help the distributor and liquor outlets to grow their capacity for providing a larger sales base by growing:

• Their retail footprints
• Managing their business better
• Better marketing and events
• Better infrastructure
• Auxiliary businesses: Transportation for drinkers, food, car washes, safety, event organisers. (School of events management by SAB.)
• Focus on safety: Use the marketing skills to help drive road and personal safety campaigns with the government.

2. Build social capital:

Community Development: Direct the skills that have been developed in sponsorship, event management, brand building, and programme management to take on sports and social development programmes:

• Co-create safety programmes with government agencies
• Take on community tournaments, school competitions, junior championship etc. Help manage social programmes, using their promotional value, activation and marketing know-how to take social communication to the next level
• Drive rehabilitation projects that will assist the identified 8% of alcohol abusers and teen binge drinkers

The alcohol industry probably won't be hit as hard as we think, yes there will some job losses but if we follow a socially focused solution to a socially driven product. We could still redeploy those skills to advance jobs agenda by growing the small businesses that support the brewery business. "Our success lies in the Success of others" - we have a connected reality"

Reading references:

A total ban on alcohol advertising: Presenting the public health case
Cabinet approves bill banning alcohol ads
Cabinet approves draft Bill banning alcohol ads
Alcohol advertising ban 'not feasible'
Websearch

Twitter ref: #AlcoholAdBan
    
 

About Lebo Mukansi

Chief Strategist at Inventors Kitchen. Twitter @Lebza1Mukansi
Sid Peimer
Very astute article - tells it like it is. My tuppence: we need to find a win-win for the industry and the indirect costs that taxpayers have to pay financially and emotionally due to its effects. Any sustainable solution needs to keep the shareholders of alcohol companies happy. Anything else is superficial. Companies need to make money and people want to drink, often inappropriately. You cannot tell people to drink less - it won't work and the alcohol companies won't gain. The don't drink and drive message from the companies should instead say: don't drink and get caught, coz that's the way we think. This might sound strange, but my proposed solution: how can we get people to drink more (or pay more for their drink) and reduce the cost to society as a whole. Planting trees in your nearest township will not cut it. Something substantial has got to be done. I'm tired of my doctor friends complaining about the workload in casualty on a Friday night.
Posted on 10 Jan 2014 12:36
Lebo Mukansi
Thanks Sid. I concur we must illustrate the value of changing direction. We illustrate the financial benefits to underscore the value of investing in society's wellbeing.
Posted on 10 Jan 2014 14:09
Ali Kibao
Well said Lebo.

I especially like what you point out about branding not being about stickers and logos.

The main casualties of the ban will be advertisers and promoters. They have to stop being lazy and think outside the box in order to get themselves out of the comfort zone by means of traditional advertising if they want to keep their jobs.

But you know what they'll never adapt to your kind of thinking as good as such ideas are, why? Because advertisers and marketers have become lazy by using templates all the time.

The way this is going they have to adapt or die.
Posted on 10 Jan 2014 14:02
Lebo Mukansi
Ali, thanks for your kind words. I really hope that the communication industry will see this as a chance to write new rules for the game. Im certain other sponsors will fill the branded sponsorship vacuum.
Posted on 10 Jan 2014 14:13
Mark Ant
So, only the cartels and monopolies such as SAB-Miller etc will be able to "help" Joe soaps tavern or restaurant or pub. The only people that win here are them and the Joe soaps that want more freebies. Nobody else, in any other sector gets any form of financial assistance or the like. Why should they???
Posted on 11 Jan 2014 13:00
Lebo Mukansi
All industries have some sort of supplier development programmes, in the case of the Brewers it becomes critical because of the impending bill. The poinThink about it this way, imagine every single sales point as franchise, of this is not accurate but its the idea behind focusing on value chain development.

Secondly its important to note that the article covers two areas 1. SALES growth and Building social capital by responding to the social impact of alcohol abuse so its not just about financial assistance but rather getting the brewing Industry to be part of the solution.

The growth of liquor sales will indelibly linked to growing small and medium buyers into bigger consumers of the brewer's products after the ban. Id like to see better run pubs that employ people gainfully than a proliferation of illegal shebeens and drinking halls.
Posted on 12 Jan 2014 11:14
heather malcomess
working in the motorcycle industry and dealing with the social side i am in favor of this however i know bikers will not stop drinking.
Posted on 13 Jan 2014 18:01
Richard Gee
With SA's high unemployment rate can we afford to lose even 1 job, let alone the 12000 that you mention. Banning advertising will have ZERO effect with regard to spousal abusive, drunk driving and disability. So the Govt should stop this time wasting and ridiculous exorcise.

If they want to get serious rather educate children better on the perils of alcohol (take them on field trips to hospitals and crashes) and increase the amount of traffic policing (the W Cape has constant road blocks, etc, and it seems to be working). Redesign our roads so that oncoming traffic cannot overtake in the 'wrong' lane (by the way most road related alcohol deaths are pedestrians, not drivers/passengers). Pay for all these projects by increasing the tax on alcohol. If a beer cost R50 each then people would drink less.

The Orwellian restrictions on smoking hasn't had the promised effect and neither will banning alcohol advertising.
Posted on 15 Jan 2014 11:10
Lebo Mukansi
Hi Richard

I agree that banning advertising alone won't change anything but its also our lack of action that has brought us here. Blaming govt is a cheap shot they didn't sell and glamorize alcohol consumption.

Our real challenge is what are we going to do in a new reality to both in terms of being socially responsible and curbing the impact of alcohol abuse.

We can point fingers or start planning for a new future that will benefit us all.
Posted on 17 Jan 2014 08:32
Richard Gee
I think are defending your opinion far too much. Of course the Govt is to blame. They have made Billions of Billions of money from the alcohol industry, who have created thousands of jobs. To penalise an entire industry as a minority of people deliberately abuse their product does not make sense.

Without motor racing on TV would people still speed?
Without TV/movies with murder scenes would people still murder?
Posted on 17 Jan 2014 11:42
Lebo Mukansi
Richard

I apologise if I seem defensive. Im not against blaming govt, I just don't see what how that will help us.

We could blame each other or work with each other. Govt wants tax of course and the alcohol industry wants to make profits. The issue is how to achieve both objectives in a manner that minimises the impact of the abuse of alcohol on society.
Posted on 17 Jan 2014 12:50
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