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Informal Liquor Retailing Informal Liquor Retailing Informal Liquor Retailing effects, notably on glass recycling and Local densities of liquor outlets are directly food take-away activities such as street correlated to income. Informal liquor Introduction braais, the liquor sector potentially retailers are more densely distributed accounts for 20% of all informal economic in informal settlements and evidently > The Sustainable Livelihoods Foundation’s Formalising Informal Micro-Enterprises activity in these communities. their distribution decreases with the (FIME) project has been conducting path breaking research on South Africa’s informal level of infrastructure investment in the economy. The project has conducted primary research in townships within Cape Town Across all sites liquor retailing businesses settlement and housing density, reducing and Gauteng. We have surveyed over 6,000 micro-enterprises in nine localities, are spatially equidistant from each other, considerably in areas of suburbia. The covering an estimated population of 50,000 households. Of the thousands of showing that their spatial distribution high density of liquor retailers in informal businesses we encountered during the extensive field work process, the most frequently (as well as density) is determined by settlements correlates with much higher and widely distributed micro-enterprises were informal liquor retailers or shebeens. Our highly localised forces of economic levels of unemployment and limited research supports the claims that there are at least between 180,000-250,000 persons demand. There is no evidence in any alternative economic opportunities for trading liquor informally in South Africa. This synopsis describes the businesses engaged site of enterprise clustering or strategic self-employment within these localities. in informal liquor trading and the entrepreneurs behind these micro-enterprises drawing positioning in relationship to transport But liquor outlet density is not, as the upon various SLF academic papers (currently under review) and analysis of the FIME nodes, including major and minor research found, necessarily an accurate research findings. roads. Informal liquor retailers are indicator of liquor consumption, as the instead positioned randomly throughout great majority of liquor retailers are THE RESEARCH SITES shebeen and tavern (licenced) traders. residential areas, with no evident intention very small businesses selling less than Although many of the businesses were to occupy corner positions or localities 16.5 crates of beer per week (150L). In Cape Town, where the research operating illegally and in a covert manner, on high streets. Furthermore, neither The density of shebeens is greater commenced, research was conducted in the research was able to identify the great their distribution nor density correlates in settlements where the majority of Brown’s Farm, Sweet Home Farm (Philippi), majority of businesses through a process to proximity to liquor wholesalers. Map households do not own vehicles, thus Delft South, and Vrygrond (incorporating of local familiarisation with enterprise 1 demonstrates the density of outlets in providing further evidence that most the settlements of Capricorn, Overcome characteristics and participant referrals. Browns Farm (a settlement of 14,000 shebeens serve a localised market Heights and Seawinds). These settlements In certain contexts, such as parts of Delft households) in the context of all other of customers who reside within are home to 36,262 households and South, the number of small size liquor informal micro-enterprises. walking distance. approximately 160,000 residents. In retailers has been potentially under- Gauteng, the research was conducted reported as a result of community fears in Ivory Park and Tembisa. The various about policing in a context of territorial sites were chosen to reflect the dynamics control battles by drug syndicates. of informality and marginalisation in poor areas and are representative of MAIN RESEARCH FINDINGS the predominant human developmental challenges within these cities. The Numbers and Spatial Dynamics research method comprised a detailed micro-enterprise census and qualitative Liquor retailers are the single most interviews with every informal liquor numerous category of micro-enterprise in trader. After eight months of research in the township informal economy. Together, the City of Cape Town, we had identified the 645 businesses in the Cape Town 645 liquor retailers, with whom we research account for 16.7% of all informal conducted qualitative interviews with 465 businesses. Through their multiplier Interviewing a small sale shebeen owner, Browns Farm. 1 2 Distribution of businesses selling liquor in context of all identified micro- enterprises. Browns Farm and Hazeldean Estate, Philippi, November 2001 ENTERPRISE SIZE AND Characteristics • Low volume = those selling less than the current formalisation process at all. to pursue liquor trading as a survivalist 16.5 crates of beer per week, a volume The issue of formalisation must been seen strategy, enabling them to derive a The research identified four forms of equivalent to 150 litres, the maximum in the context of the highly racially skewed relatively secure income whist looking after liquor micro-enterprises, namely i) permitted volume threshold under the structure of liquor licence ownership within their families at home. Among both male taverns (licensed premises), ii) shebeens Western Cape Liquor Act for home the Western Cape where less than 15% of and female informal liquor traders there is (unlicensed liquor retailers), iii) spaza- consumption. liquor licences have been awarded to black significant longevity in the sector with the shebeens (spaza shops that sell liquor owned businesses. average enterprise in our sample having without a licence) and iv) businesses that • Medium volume = those selling between traded for 5.6 years. micro manufacture traditional beer or 16.5 crates and 65 crates of beer per The history of informal liquor retailing in other concoctions for on-site consumption. week. South Africa is synonymous with the rise There are various reasons why people Shebeens are the most numerous of these in female micro-entrepreneurship. This decided to trade liquor despite the risks. categories. The research found that there • High volume = those selling above 66 is evident in our research were we found A significant number of the research is no archetypical shebeen; rather, there crates per week, equivalent (formerly) that 55% of the surveyed businesses were participants who had entered the sector is a great diversity of shebeen businesses to one pallet, the minimum quantity for owned by women. The data shows that within the past two years cited the growing targeting different market segments. It direct delivery from the manufacturers. women are equally represented across dominance of foreign nationals in the is common for each shebeen to target all three tiers of enterprise size, showing spaza market, compelling them to close different clientele. The niche characteristics In terms of size, the sector is heavily that there are no specific barriers to their shops and turn to liquor trading. For of the informal liquor market have arisen skewed towards businesses selling less the participation of women in the liquor these entrepreneurs, their objectives are through the varying social preferences than 16.5 crates of beer per week with retailing sector. Indeed there are livelihood economic survival, as is encapsulated in within local neighbourhoods for contrasting 60% (273 of the 465) of the surveyed (push) factors that encourage women the following statements: environments, with, as a result, some businesses falling into this category. A shebeens offering music and games and mere 27 businesses sell high volumes of Figure 1: Enterprise Size of Liquor Retailers others not. Some shebeens permitting liquor. The sector structure, in volume women to purchase liquor and others terms, is shown in Figure 1, illustrating not, some shebeens selling liquor to all the pyramidal structure of informal liquor customers, and others restricting entry to retailing with most businesses operating specific age cohorts. Less than 20% of the at the base level. In terms of their legal 400 High volume turnover 465 businesses that we surveyed provided status, 30 businesses held liquor licences, (above 66 crates p/w) entertainment in the forms of games, representing 6.5% of the 465 surveyed 350 television or juke boxes. The political liquor retailers. Eighty three businesses 300 Medium volume turnover stereotype that shebeens generally play (inclusive of those with liquor licences) (16.5-65 crates p/w) (loud) music and attract a youth-based had at some point in the past five years 250 clientele was found to be incorrect made an effort to conform to legislation 200 Low volume turnover (below 16.5 crates p/w) and misleading. by applying for a liquor licence, with 150 many applying in the past 12 months. A In order to distinguish businesses in terms considerable number of licence applicants 100 of their size, the research used weekly have been waiting years for the outcome 50 beer sales as a proxy indicator (using the of their application. Despite the efforts of unit, 1 beer crate = 12 x 750 ml bottles). a minority to formalise, over 80% of all 0 It then categorised all businesses into one informal liquor retailers – primarily the Shebeen / tavern sector categorised by volume of beer sales per week, c May-December 2011 of three
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