Rethinking Liquor Regulation in South Africa

Every few months, anti-liquor lobbyists call for stricter liquor laws to combat alcohol abuse. However, research and statistics show that tighter regulation does not address the real problem. Instead, it fuels the growth of the illicit liquor trade in South Africa.

The Growth of the Illicit Liquor Market

According to Euromonitor International, presented at a recent Drinks Federation of South Africa (DFSA) webinar, the illicit liquor market in South Africa almost doubled from R12.8 billion in 2017 to R25 billion in 2024. This means that one in five liquor products sold in the country is illicit.

The problem extends beyond products. Research also indicates that one in three outlets selling liquor in South Africa is unlicensed. Stricter liquor regulation has no effect on these illegal businesses, as they operate outside the legal system.

Compliance Among Licensed Outlets

The Western Cape Liquor Authority’s own statistics show a very different picture for licensed businesses. In 2024, of the nearly 9,000 licensed liquor outlets in the province, only about 150 faced complaints or negative reports serious enough to affect the automatic renewal of their liquor licences. These figures confirm that licensed outlets generally comply with the law.

Why Stricter Liquor Laws Fail

At a DFSA discussion in 2023, Liquor Authorities acknowledged that over-regulation contributes to the growth of the illicit sector. They agreed that the process of obtaining a liquor licence should be made easier, not harder. When businesses are part of the regulated system, compliance levels are high and consumers are better protected.

A New Approach to Liquor Licensing

It is clear that South Africa needs a new approach to liquor legislation. Instead of making it more difficult to obtain a liquor licence, legislation should make it easier for legitimate businesses to join the regulated industry.

This aligns with the liquor policy adopted by the national government in the late 1990s, which aimed to transform outdated apartheid-era laws. That policy specifically stated that legislation should open the liquor trade to those previously excluded. It was also the guiding principle behind the development of the Western Cape Liquor Act.

Unfortunately, subsequent amendments to both the national and provincial liquor laws have moved in the opposite direction, creating unnecessary barriers and limiting opportunities for new entrants into the industry.

The evidence is clear. Stricter liquor regulation in South Africa does not reduce alcohol abuse or protect communities. Instead, it drives the expansion of the illicit liquor trade. By making it easier for businesses to apply for and obtain liquor licences, government can strengthen compliance, grow the formal economy, and ensure safer practices in the liquor industry.