STUDY ON THE SOCIO - STUDY ON THE SOCIO - ECONOMIC PROFILE OF - PowerPoint PPT Presentation

Recommended Citation: Ngandu;, S., Ngwenya;, M., Gwenhure, Y., & Mathebula, J. (2014). Study on the Socioeconomic Profile of Liquor Outlets in Limpopo South Africa . Presented on the Human Sciences Research Council Seminar Series, Pretoria, 26 August 2014. STUDY ON THE SOCIO - STUDY ON THE SOCIO - ECONOMIC PROFILE OF LIQUOR ECONOMIC PROFILE OF LIQUOR OUTLETS IN LIMPOPO OUTLETS IN LIMPOPO Stewart Ngandu; Makale Ngwenya; Yvonne Gwenhure & Jabulani Mathebula Presented on the HSRC Seminar Series Pretoria, South Africa 26 August 2014 ECONOMIC PERFORMANCE ECONOMIC PERFORMANCE AND DEVELOPMENT AND DEVELOPMENT

1. Introduction 2. Methodology 3. Results of the survey on liquor outlets 4. Policy Recommendations

• Lots of debates in the popular press that focus on the liquor industry, very little information on liquor outlets . • This is also true for the province of Limpopo where there was a desire by local authorities to better understand various aspects of liquor outlets. • Information is needed for regulatory purposes and to address broader developmental issues in the province . • As such this will be the first study of its kind to assess the economic and socio-economic profile of liquor outlets

• This study is divided into two parts ; • The first gives a comprehensive profile of liquor outlets in the province which assesses their: • Ownership structure, • Employment dynamics, • Cost of setting up a liquor outlet, • Compliance to tax and compliance with regulations as stipulated by the liquor act. • The second part of the report will explore the socio-economic impacts of liquor outlets on the province of Limpopo through a focus group discussion .

Objectives • To assess regulatory issues around compliance as per liquor act . • To assess the employment dynamics of liquor outlets with respect to the relationship of workers with the owner of the liquor outlet and the number of people they employ. • To determine the VAT/UIF and income tax registration status of liquor outlets in Limpopo. • To determine the cost of setting up a liquor outlet . • To assess associated social impacts through focus group discussions with law enforcement and emergency health services officials.

• This study used a qualitative and quantitative survey • Sample was drawn from the population of licensed liquor outlets in the province. • The sample frame was obtained from the Provincial Liquor Board. Each district formed a single stratum . • To ensure representativeness, proportionate stratified random sampling was used. • The target sample was 260 and final realised sample as 268 ; given the population of close to 7 800 outlets this sample would give results that have an acceptable 10% level of precision. • In order to achieve this number of outlets a sample of 450 outlets was selected . This included a contingency sample of 190 outlets. • The contingency sample would be used in cases where there was a non-response due to an outlet being closed or the inability to locate an outlet due to a wrong address.

• Unavailability of socio-economic data on liquor related socio-economic outcomes • The survey used one instrument to interview the different types of liquor outlets (e.g. restaurants, accommodation, supermarkets etc). Different instruments should have been developed for each of these. Two reasons : • First , couldn’t tell the different types of outlets from the sample frame that was supplied by the Liquor Board . Using the outlet’s name would have introduced some level of selection bias . • Second , when the issue of stratifying according to the different class of liquor outlets was raised the Liquor Board responded by saying their focus is on- and off-consumption outlets . As such only one instrument was developed. • Focus group : The fact that participant insights were based on anecdotes limits the significance of some of their inputs.

FINDINGS

• Ownership • On average, 47% of the respondents were the actual licence holders and 52% were people employed by the licence holder. We would expect outlets run by the licence holders to be more compliant with • regulations than those where the person in charge is an appointee. CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total Licence holder 60% 33% 53% 35% 45% 47% Person appointed by 38% 67% 46% 65% 55% 52% licence holder Temporary employee 2% 0% 1% 0% 0% 1% Total 100% 100% 100% 100% 100% 100% Type of licence • CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total Off-consumption 18% 11% 21% 20% 16% 17% licence On-consumption 82% 87% 79% 80% 82% 82% licence I don't know 0% 2% 0% 0% 2% 1% Total 100% 100% 100% 100% 100% 100%

Number of years in business • A significant number of liquor outlets in the province have been in operation for a relatively long period of time, with 60%, 4680, of them reporting that they had been in operation for more than 5 years. • Furthermore, 33% of these had been in operation for more than 10 years and these made up the bulk of the sample. CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total Less Than A 9% 0% 1% 6% 7% 5% Year Ago 1 But Less Than 14% 11% 10% 3% 4% 9% 3 Years Ago 3 But Less Than 24% 15% 24% 11% 22% 20% 5 Years Ago 5 But Less Than 29% 24% 27% 31% 25% 27% 10 Years Ago 10 Or More Years 20% 43% 31% 49% 35% 33% Ago I don’t Know 5% 7% 6% 0% 7% 5% Total 100% 100% 100% 100% 100% 100%

Main reason for starting the business CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total Cum. % Unemployed/Have No 39% 27% 34% 25% 28% 32% 32% Alternative Income Source Retrenched 6% 7% 3% 3% 0% 4% 36% Inadequate Income From 3% 5% 16% 13% 9% 9% 45% The Other Source Inherited/Family Tradition 9% 9% 14% 16% 11% 12% 56% Activity Brings High 3% 7% 5% 3% 9% 5% 62% Income Unhappiness With 0% 2% 2% 0% 2% 1% 63% Previous Work I Like The Activity 14% 7% 8% 9% 17% 11% 74% I Have The Skills For This 9% 9% 5% 6% 4% 7% 80% Business I Have The Equipment 0% 2% 0% 0% 0% 0% 81% For This Business Small Investment Needed 6% 11% 6% 9% 4% 7% 88% Other 3% 5% 5% 3% 4% 4% 92% I don't know 8% 9% 3% 13% 13% 8% 100% 100% 100% 100% 100% 100% 100%

• LOCATION • Does this business operate in (a) a residence or (b) in a business zoned area? • Implications on compliancy 4 368 outlets in residential areas CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total A residence 60% 54% 53% 56% 57% 56% A business 40% 46% 47% 44% 43% 44% zoned area Total 100% 100% 100% 100% 100% 100% • Do you pay for use of this location for business purposes? • Business does not factor in rental cost. CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total Yes 26% 24% 19% 26% 36% 26% No 74 % 74% 81% 71% 60% 72% Not 0% 2% 0% 3% 4% 1% applicable Total 100% 100% 100% 100% 100% 100%

Is it easy to get a liquor licence? • Some of the sampled outlets said they had experienced challenges with respect to meeting some of the requirements needed to acquire a licence; they viewed the process as being onerous and overly involved. Encourages informality. 70% 59% 58% 60% 52% 51% 51% 50% 44% 40% 33% 31% 30% 28% 28% 27% 26% 24% 22% 18% 20% 18% 16% 16% 10% 0% CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total YES NO I don't know

What are the challenges involved in the setting up of a liquor outlet? *Lack of information and not knowing the procedures for applying for the required licence. 80% 69% 70% 64% 62% 61% 60% 60% 56% 50% 40% 30% 30% 24% 23% 21% 18% 20% 15% 12% 10% 10% 7% 7% 7% 6% 6% 5% 5% 5% 4% 4% 4% 3% 3% 3% 2% 2% 2% 0% 0% 0% 0% 0% 0% CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total Information related reasons* Lack of capital Distance to the nearest Liquor Board Corruption I don’t know Other

Did the licence holder of this outlet use a consultant to APPLY for the licence? 70% 66% 63% 60% 54% 53% 50% 45% 44% 40% 33% 29% 30% 24% 24% 23% 21% 20% 19% 20% 17% 16% 14% 13% 10% 7% 4% 3% 3% 3% 0% 0% CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total YES they used a consultant NO they personally applied for the licence I don't know Not applicable

Why was a consultant used to APPLY for the licence? 90% 80% 80% 68% 68% 70% 66% 61% 60% 60% 50% 40% 30% 27% 25% 24% 19% 20% 16% 14% 8% 8% 10% 7% 7% 6% 6% 5% 5% 4% 3% 3% 3% 3% 2% 2% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total Did not know the procedures No time to apply personally Long distance to the nearest Liquor Board To avoid corruption I don't know Other

Did the licence holder of this outlet use a consultant to RENEW the licence? 80% 71% 69% 69% 70% 63% 59% 60% 50% 47% 40% 38% 30% 25% 23% 22% 20% 20% 16% 11% 11% 10% 9% 9% 10% 7% 5% 4% 3% 3% 3% 3% 0% CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total YES they used a consultant. NO they personally applied for the licence. I don’t know Not applicable

Was it easy to obtain funding? 70% 60% 60% 56% 53% 52% 51% 50% 42% 40% 37% 35% 29% 29% 30% 27% 23% 21% 21% 18% 20% 17% 15% 14% 10% 0% CAPRICORN MOPANI SEKHUKHUNE VHEMBE WATERBERG Total Yes No I don't know