How the alcohol levy nearly killed St Louis
Mbongeni Mguni | Friday October 5, 2018 14:57
The Ministry of Health and Wellness last year commissioned the Botswana Institute of Development Policy Analysis (BIDPA) to study the impact of the alcohol levy. Government officials have slowly revealed titbits from the study as they traverse the country in the ongoing consultations on the levy and trading hours.
The full study, made available recently to Mmegi, shows that as the cost of getting drunk rose over the years since the levy’s inception in 2008, drinkers migrated to stronger products, treading St Louis underfoot.
Liquor business owners told BIDPA researchers that consumers had switched to beverages with high alcohol content so that they could get drunk quickly.
“As consumers switch to alcoholic beverages with high alcohol content and spirits, the local brand, St Louis has suffered as it has low alcohol content,” the researchers found.
“In addition, the alcohol producer and distributors have observed that consumers have switched to buying in bulk as this is relatively cheap.
“For instance, consumers have switched from buying 330 ml to 440 ml cans and more importantly to 750 ml bottled beer. This is supported by the results from the survey of drinkers which indicate that indeed consumers have switched to bulk products.”
At 3.5 percent, St Louis was marketed successfully as a light, refined taste prior to 2008, but with the inception of the levy, strategists at Kgalagadi Breweries struggle to find space for it in a market leaning towards stronger drinks.
Adjustments were made to the standard can to introduce a higher value ‘Long Tom’, alternatives such as St Louis Export were launched, marketing campaigns and activations were heightened, but St Louis’ popularity plummeted.
Earlier this year, KBL announced that Black Label (5.5 percent) was the group’s most popular brand with its sales rising by 3.5 percent last year, even as overall clear sales volumes shrank by 11%.
Sefalana group managing director, Chandra Chauhan has also noticed the trends. Sefalana is amongst the country’s top wholesalers of various liquor brands.
“Botswana used to be St Louis country, making up to 60% of our sales, but now it’s Carling Black Label,” he says.
“We made our people drink strong substances to get high.“At one point, we used to export St Louis to South Africa, but now it’s a dead product.”
BIDPA researchers say the search to get high cheaply has led imbibers to illicit brews, where some have lost their lives over the years.
“Unfortunately, some of these brews are illicit and can cause grave harm to the consumers as their production is not controlled.
“Instances of possible deaths have been reported in the news as a result of abuse of illicit alcoholic products brewed in the homes.”