The Opportunities in the Alcohol Advertising ban. It’s obvious that banning alcohol promotion won’t stop people from drinking but it’s also abundantly clear that the social cost of alcohol abuse is much more than society can ill afford. Despite the stats from the Alcohol lobby that says that of all drinkers only 8% abuse alcohol. The social cost is too high and instead of fighting the government the alcohol industry should be looking at helping society to recover from the heavy impact of alcohol abuse.
Pros and Cons of the Ban This article is not about the pros and cons; it’s about what would be good for everybody involved and how the alcohol lobby can respond to the inevitability of the Alcohol and sponsorship restriction bill. I have compiled what the main arguments for each side:
|Alcohol Lobby Business and affected parties||Govt and Society|
|R7.4 Billion loss to the SA GDP||R38 Billion annual cost of alcohol abuse (R240 billion – intangible costs)|
|12 000 possible job losses.||70% of reported domestic violence in 2008 involved alcohol.|
|R700 Million loss in Sponsorships in 2014: Team sports will lose out on billions in sponsorships. (cricket, soccer and rugby etc)||High prevalence of alcohol in in high number of death and disability stats. Alcohol is the third leading risk factor for death and disability in the country and was responsible for around 130 deaths every day|
|Universal truth: People will consume alcohol anyway despite the ban.||Universal truth: A world with less alcohol abuse would be better for all.|
What should the alcohol industry do: Change direction? If I was CEO at SA Brewers or Distell, I’d say to my marketing team “The ban is inevitable, you are now our Intermediary Development division; you keep your budget only the strategy is “growth through others” This is the story, I would outline to them: What the alcohol advertising ban means for Joe’s pub? “Joe’s pub is based in Alexandra; he attracts large crowds over the weekend. His capacity has topped out; he can only host about 100 people but caters for more than 300 people who end up standing in the streets and bringing in alcohol. Joe could be selling more alcohol but he is constrained by the space for seating and stock purposes. He also doesn’t have card facilities which lead to delayed or lost sales. He also needs various business advice and services like accounting, marketing and business strategy in order to grow the business. All the brands that Joe deals with must have supported him to the tune of R200 000 in advertising, event and marketing support but this has done little to grow his business and prepare him for growth and to be a greater contributor to these brands bottom lines. As SA Brewers and other distributors we have built up a substantial amount of knowledge and experience in the power of marketing, business and brand building. Ladies and Gentlemen from tomorrow your job is to help Joe grow his business in a sustainable and scalable manner.”
The Numbers: Advertising Spend Top 3 Brewers (SAB, Distell & Brand house) spent around R1.5 billion in advertising in 2012 in the wake of the coming legislation on restricting alcohol marketing and sponsorship this can become a big supply development opportunity. The distributor and the liquor outlets will become the battle grounds of the alcohol sales contest but more importantly these outlets are direct lever on increasing sales and product consumption. The value of branding isn’t in the sticking of logos on things; the true value of branding is its impact.
The Ban is inevitable On September 18, 2013, the South African Government Cabinet approved the Control of Marketing of Alcohol Beverages Bill. Ideally the Alcohol ban means that knowledge that has been developed over the years can now be converted into supplier development instead of wasting money of lobbying misadventures. Regardless of what we think about the “Restriction on Alcohol and sponsorship bill” will happen the key question is what the affected parties will do in this regard.
What should business do? In the current format marketing for Brewers and sponsorships does a single brand job, i.e. Hansa Pilsner sponsors an event. Castle sponsors rugby. An advertising campaign for brand X and so on. This brand focus is then driven into the distributors, Liquor outlets, various sporting and entertainment events etc. The process above is one that is driven by the basic impetus: sales (individual brand sales) this game won’t wash in the new reality. So let’s assess what happens with the ban:
- Sales: The industry will be restricted in the communication efforts in advertising and sponsorship but the need to sell does not go away.
- Skills: The business need for marketing and sponsorship is by and large not lost, those skills still exist to implement and to build alternative “marketing activity”
- Resellers: The need to find more business clients still exists. People who can buy serve our clients with our products are still needed.
The New approach This strategy has two objectives, 1. Build Social capital and 2. Grow sales in a sustainable and scalable manner. This is how 1. Grow Sales : Develop arm of new arm in brewery business the “Intermediary Development” Department. Develop a business capacity to help the distributor and liquor outlets to grow their capacity for providing a larger sales base by:
- Growibg the retail footprints,
- Managing their business better
- Better marketing and events
- Better environments
- Auxiliary businesses: Transportation for drinkers, food, car washes, safety, event organizers.( School of events management by SAB )
- Focus on Safety: Use the marketing skills to help drive road and personal safety campaigns with the government.
2. Build Social Capital: Direct the skills that have been developed in sponsorship, event management, brand building and programme management to take on sports and social development programmes.
- Co-create safety programmes with government agencies.
- Take on community tournaments, school competitions, junior championship etc. Helping manage social programmes using their promotion in, activation and marketing know how to take social communication to the next level.
- Drive rehabilitation projects that will assist the identified 8% of alcohol abusers and teen binge drinkers.
The bottom-line of the alcohol industry probably won’t be hit as hard as we think yes there will some job losses but if we follow even a less socially focused solution we could still redeploy those skills to advancing job creating by growing the small businesses that support the brewery business. “Our success lies in the Success of others” – we have a connected reality References:
Twitter ref: #AlcoholAdBan