Jobs, business growth and improved safety on the cards as shebeen owners go legal

Informal liquor traders are being empowered to become legally compliant, trade responsibly and grow township economies and jobs through a unique partnership between the National Liquor Traders, Distell and Absa.

Research conducted on behalf of the liquor industry has shown there are about 50 000 unlicensed liquor outlets in the country, mostly in townships and rural areas. As many as 80% of these shebeen owners survive from hand-to-mouth and show limited adherence to liquor regulations and responsible trading practices.

Obtaining a liquor licence is an expensive and complex process that many shebeen owners struggle to manage.

“Our research and experience in piloting a formalisation process in the Western Cape shows that obtaining a licence can unlock significant growth for the outlet,” said Clarence Sibiya, Head of the Responsible Alcohol Project at Distell.

“Being a registered business opens up access to credit, commercial terms, and marketing and sales support, which also allows the owner to increase storage capacity and refrigeration and upgrade their premises to make for a safer trading environment.

“This leads to a 160% increase in revenue on average and the creation of a potential three additional jobs per outlet,” Sibiya said.

“If you multiply that by 50 000 outlets that have no licence, it’s clear there is great employment creation potential as well as growth opportunities in township economies that can stimulate further localised development.”

Convenor of the National Liquor Traders Lucky Ntimane said there were additional benefits for communities as licensed outlets needed to comply with their licence conditions, which include adhering to stipulated trading hours, providing a safe environment for customers, with adequate lighting and bathroom facilities, as well as compliance with Covid-19 safety protocols.

“As part of the process, we also take the business owner through the benefits of trading responsibly by not selling to clearly intoxicated patrons, for example, and keeping noise levels down. This makes the business more sustainable for the long term and creates goodwill in the community,” Ntimane said.

“Our formalisation drive will catalyse business and employment growth while improving compliance and safety,” Ntimane said.

The formalisation drive was launched in KwaZulu-Natal in Inanda, where about 60 shebeen owners attended a workshop at Leon’s Tavern to learn about the support being offered by Distell and Absa.

Keketso MotšoeneAbsa’s Managing Executive for Kwa-Zulu Natal and Mpumalanga, said the bank was on hand to guide outlet owners on the process of accessing funding and more secure banking services.

“We will advise them on the best banking solutions based on what their business will look like, and those who register with us will have free access to our cash-flow manager system which is embedded on our Business Evolve transactional account. This is an easy-to-use accounting system that can provide payslips, and create quotes and invoices at the press of a button, while keeping track of cash flow, which is often where informal businesses struggle,” said Motšoene.

“Beyond funding and banking services at the lowest cost, Absa will also provide business development support to empower these outlets to grow sustainably.”

Distell has engaged the services of specialists Supply Pal to help shebeen owners with the licence application process, providing assistance with zoning applications, building plans and the development of sustainable business plans by identifying gaps in the market for new offerings such as food, services and entertainment. Distell will also seek to partner with Provincial Liquor Boards and local government to support the formalisation campaign.

Focus groups like the one held in Inanda today will be rolled out in KwaZulu-Natal, Gauteng and the Eastern Cape, following the pilot phase in the Western Cape, with an initial employment creation target of 4 296 jobs across a total of 200 outlets.