A Comparative Study between Tavern and Shebeen License Holders in Yeoville, South Africa

This study primarily focused on the township segment of the liquor industry and within the township,
the research project looks at the on-premise consumption channel. This segment is depended on the
route to market stakeholders that are part of the value chain for supply. The distributors include big
corporate outlets such as Makro, Ultra Liquor and independent distributors. Taverns plays a very
critical part in the value chain which is, where consumers interact with brands. This is the decisive
moment for brands - at this point in the value chain consumers vote with their wallets. The biggest
challenge for the industry about the township outlets is lack of data to make informed strategic
decisions. One of the key sources of information that allows suppliers to plan is the actual number of
licensed vs unlicensed outlets. Type and size of outlets attract different level of investment to allow
the incumbents to be competitive. An estimated 64 000 licenced outlets operate in South Africa;
however, the total base is between 180 000 - 250 000 with the majority being unlicensed. Suppliers
are restricted by law to do business with unlicensed outlets. The introduction of shebeen permits by
the Gauteng Provincial Government presented an opportunity for the manufacturers and therefore
they supported the implementation of this regulation. However, this regulation presented challenges
for the liquor industry and was met with a lot of resistance from the concerned stakeholders – like the
case between Yeoville Bellevue Ratepayer's Association and Another vs MEC for the Department of
Economic Development in Gauteng Province. This case gave birth to a need to study the differences
between the licenced outlets vs those in position of permits in respect of how different are these
businesses and what is the real threat of shebeens being awarded shebeen licences?