A six-pack named despair

Staff Writer | Wednesday February 12, 2014 15:54

hether it is a strategic gambit or a case of brinkmanship, reports emanating from one of the country's most established citizen brands, Kgalagadi Breweries Limited, make for ghastly reading.

However, paradoxically, KBL is in essence, a victim of its own success. The group's traditional and clear beer products, as well as its host of non-alcoholic beverages, are wildly popular with Batswana and KBL has been regaining market share lost in previous years to external competitors.

The group is not suffering from a loss of market, stiff competition, product unpopularity or even mismanagement. It is suffering from the irony of having a gaping, eager market but a product whose output is increasingly unsustainable due to issues outside its factors of production.

Since its introduction, the alcohol levy has been a highly divisive issue in a land where alcohol consumption is inextricably woven into the cultural fabric, prominent in rituals, events and gatherings of any nature. Alcohol abuse was always going to be a challenge, due in part to the country's rising wealth over the decades and the attendant socio-economic inequality. Factor into this, rapid urbanisation, the youthfulness of the working population, absence of alternative recreational facilities as well as global cultural influence around the acceptance of alcohol.

While Botswana is not unique in this regard and at approximately 27 litres per capita per annum, still at the lower end of the African and world spectrum, alcohol abuse is certainly a matter of national concern. When weighed together with national perennial challenges such as productivity and work ethic, abuse should indeed be mitigated through both supply and demand side interventions.

It should also be remembered that at present, the KBL group employs about 1,000 employees who, it can be inferred, support a minimum of 6,000 family members directly and indirectly. It should also be remembered that the KBL group contributes tens of millions of Pula in tax to public coffers every year, as well as dividends to shareholders who include Batswana and government, via the BDC. Even as authorities weigh further increases to the alcohol levy, and as they study its efficacy, they should also consider that only a hammer views every problem as a nail. Today's thought

'Mankind likes to think in terms of extreme opposites. It is given to formulating its beliefs in terms of Either/Ors, between which it recognises no intermediate possibilities.'

- John Dewey

That after 37-years, a company built from the innovation and foresight of citizen entrepreneurs and having contributed over the years to this country's economy, should pack up and relocate to South Africa, is unfathomable. If the reasons behind the latest developments, whether factual or gimmicky, were the loss of market, competition, product unpopularity or even mismanagement, the news from KBL would still be regrettable but understandable.However, paradoxically, KBL is in essence, a victim of its own success. The group's traditional and clear beer products, as well as its host of non-alcoholic beverages, are wildly popular with Batswana and KBL has been regaining market share lost in previous years to external competitors.The group is not suffering from a loss of market, stiff competition, product unpopularity or even mismanagement.

It is suffering from the irony of having a gaping, eager market but a product whose output is increasingly unsustainable due to issues outside its factors of production.Since its introduction, the alcohol levy has been a highly divisive issue in a land where alcohol consumption is inextricably woven into the cultural fabric, prominent in rituals, events and gatherings of any nature. Alcohol abuse was always going to be a challenge, due in part to the country's rising wealth over the decades and the attendant socio-economic inequality. Factor into this, rapid urbanisation, the youthfulness of the working population, absence of alternative recreational facilities as well as global cultural influence around the acceptance of alcohol.While Botswana is not unique in this regard and at approximately 27 litres per capita per annum, still at the lower end of the African and world spectrum, alcohol abuse is certainly a matter of national concern. When weighed together with national perennial challenges such as productivity and work ethic, abuse should indeed be mitigated through both supply and demand side interventions.

The question that KBL and many members of the public are asking is whether an alcohol levy of 50% with promises/threats of further increases, does not amount to burning the house to kill the cockroach? It should be remembered that KBL's genesis tracks back to the 1970s when the Botswana Development Corporation (BDC) set up Sechaba Brewery Holdings Limited to hold investments in the beverage sector on behalf of the citizens of Botswana.It should also be remembered that at present, the KBL group employs about 1,000 employees who, it can be inferred, support a minimum of 6,000 family members directly and indirectly. It should also be remembered that the KBL group contributes tens of millions of Pula in tax to public coffers every year, as well as dividends to shareholders who include Batswana and government, via the BDC. Even as authorities weigh further increases to the alcohol levy, and as they study its efficacy, they should also consider that only a hammer views every problem as a nail.

Today's thought

'Mankind likes to think in terms of extreme opposites. It is given to formulating its beliefs in terms of Either/Ors, between which it recognises no intermediate possibilities.'

- John Dewey