The Alcoholic Drinks and Control (Amendment) Bill, 2020 continues to attract opposition from a number of different institutions in the country.
The ADCA Amendment Bill, 2020, is seeking to increase the minimum packaging of alcoholic drinks to 750ml from the current 250ml.
In a memo to the Clerk of National Assembly, the Institute of Economic Affairs said that the proposals will cause huge adjustment costs on the supply side and not the demand side where the proposer asserts that the problem of excessive drinking exists.
It said that the approach is a clear case of “Policy Mistargeting because the manufacturers and the packagers will have to pay for the costs of the changes in packaging quantities because of their new obligation as suppliers.”
According to the institute, the effect of this regulation on the minimum quantity of bottles and packaging sizes will create distortions on the supply and lead to shrinkage of the share of the formal alcohol market.
“The purpose of amendment of section 3 of the bill is to establish a Deposit Refund mechanism to encourage recycling of glass bottles and reduce environmental pollution. There’s no contention that pollution is a negative externality with costs that need to be contained.”
It added that the proposals will raise the costs on the supply and could inevitably shrink the market share of formal alcohol and lead to unintended consequences
Further, the institute wants a regulation of glass bottles for alcohol manufacturing to be carried out separately from all bottle production.
“There is a need to distinguish between alcohol manufacturing and glass recycling and the bill does not make that distinction. Glass manufacturing and recycling are two separate value chains that coexist with each other."
