Research

The alcohol value equation: a net positive effect on South African society

Reference:

A cost benefit analysis for alcohol in South Africa for the year 2019. A report compiled for SALBA, Basa and Vinpro by Prof. Mike Murray, Associate Professor in the School of Mathematics, Statistics and Computer Science, University of KwaZulu-Natal and Prof. Graham Barr, Emeritus Professor in Statistical Sciences, University of Cape Town.

There is often a debate regarding the net effect of the alcohol industry in South Africa. A recent study conducted by Murray and Barr (2019) provides a comprehensive assessment of the value equation of the alcohol industry in South Africa, considering both its tangible and intangible economic benefits and contrasting them with social and health costs.

The authors estimate the benefits of the alcohol industry by including its contributions to GDP, job creation, and consumer enjoyment. They also highlight the intangible benefits derived from consumer surplus and the role of alcohol in social interactions.

On the cost side, they calculate both tangible and intangible costs, considering factors like health, motor accidents, and alcohol-related crime. The study’s net impact figure indicates that the alcohol industry contributes significantly to South African society, with an estimated net benefit of R62.01 billion per annum.

The authors suggest that addressing issues like underage drinking and drunk driving through monitoring and policing would be most beneficial as stricter alcohol policies could lead to an increase in the illicit market and negatively impact the economy, particularly the tourism sector.

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