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Statement by the Southern African Alcohol Policy Alliance March 2015

Alcohol industry digs deeper into Africa

In a recent statement Diageo Plc, the maker of Guinness beer and Johnnie Walker whisky, indicated that it wants Africa to account for 20 percent of its sales as it has invested more than $1 billion in the continent over the last five years. Chief Executive Officer Ivan Menezes said he wants to see a 7% growth in consumption of Diageo’s products in Africa because it makes good business sense for the company.

Diageo communications have highlighted their financial contribution to Ethiopia, where their newest African brewery is based. Ethiopia he says, is attractive because it has a projected 8.1% annual growth and Diageo wants Ethiopians to spend that income on their alcohol products.

Diageo also has breweries in other countries on the continent such as Cameroon, Ghana, Kenya, Nigeria and Uganda.  The brewery is driven by the income that they will make, but the harm that their product will cause is a cost that they have not calculated. Because Diageo will not pay for that cost. Ethiopians will, through road traffic accidents, interpersonal violence, cancers, strokes and heart disease, as a result of alcohol use and misuse. These harms are well-documented but ignored by alcohol companies.

Not so long ago, in the 1990s, South African Breweries (Now SAB Miller) General Director noted that there are nearly 400 million bottom-of-the-pyramid (BOP) consumers in Africa who live on less than USD$2/ day.  Their focus then was on developing products that this market could afford, that is a product that was less than USD$2/day. Research shows that the poorer a society or a community, the higher the cost of alcohol harm, since they or their families carry most of the burden of ill-health, accidents or unemployment that results from alcohol use or misuse. In Africa today, most countries do not have free health care, social welfare systems or full employment. The alcohol companies want these communities to carry the cost of harm while they take the profit.

A direct cost-analysis of the income and costs of alcohol production and sales in South Africa in 2009-2010 found that the per annum harm (R17.1 billion) was more than the per annum income (R16 billion). The country’s Department of Trade and Industry followed this up with their own cost analysis in which they looked at the direct and indirect costs of alcohol consumption and reached a figure of R38.5 billion per annum.

It is clear that when a company such as Diageo makes an investment by building a brewery the assumption of a benefit to Ethiopia, and by extension the African continent, is by no means accurate. Rather, it is clear that the company will benefit, but that the people of this continent will not. They are instead being targeted by an alcohol industry that is losing its clients in the developed world because they are aware of the harm that alcohol causes to health and to the social fabric of society. Given the current high rates of HIV, road traffic deaths, teenage pregnancy, violence against women and sexual assault on the continent, all of which are linked with alcohol consumption, it is imperative that African civil society condemns the opening of yet another brewery on our continent. Such a business venture will bring benefits only to the minority employed there directly, but the harm will spread far and wide to a continent working hard to improve the quality of life of all.

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