Profits or health Olcott Gunasekera

Half of the world's population of six billion people lives in Asia. Expansion in this area has been a central aim of transnational companies. Sri Lanka is a classic example of how big alcohol and big tobacco have influenced internal policy. They have achieved the postponement by over three years, although not yet the abandonment, of a Bill to stop the advertising of alcohol and tobacco and bring these products under systematic control.

Fifty two per cent of the families of Sri Lanka live below the poverty line. Their earnings are less than US$ 1.00 per person per day. Studies have shown that many of the users spend 30 – 40 per cent of their meagre family income on alcohol and tobacco.

The disastrous effects of the habit of drinking on the economic and social development and the well-being of the family and people prompted the Government of Sri Lanka in 1998 to appoint a special committee to formulate a national policy for the control of alcohol, tobacco, and illicit drugs.

Legislation to implement the recommendations of the Committee was drafted and gazetted by the Parliament of Sri Lanka as far back as September 1999. Draft bills so gazetted are, under normal circumstances, placed on the Order Paper for discussion and ratified by Parliament within three to four months. For example, a draft bill to protect the rights of the ageing population that was published at the same time, became the law of the land in January 2000. However, as regards the Alcohol and Tobacco Bill, an invisible hand prevented its coming on to the Order Paper before Parliament was prorogued in October 2000.

The draft Bill was revived in early 2001 and when the Bill was almost ready for re-gazetting the alcohol lobby took up the issue of defining what an alcohol product actually is. Even in the draft Bill of 1999, 'alcohol product' was interpreted to mean "a beverage containing a volume of one percent or more of alcohol". The industry made representations to the Ministry of Finance that the percentage of alcohol to make a product classified as an alcohol product should be raised to 4 per cent. It was a sinister move by the beer industry, and without any consultation, the government has decided to create a new excise band of Rs. 5.00 per litre for beers of less that 4 per cent alcohol. A further concession was to allow beer to be sold at special beer outlets.

The main argument, at least on paper, for lowering the taxes on beer and making it more accessible was the belief that the beer lobby has promoted the belief that it would resolve the increased production and consumption of unlicensed liquor.

The policy makers have failed to acknowledge two things: firstly, according to figures presented to the government by the beer industry itself, the increase in beer production and consumption has not reduced the production and consumption of unlicensed liquor and, secondly, beer is a 'bridging' drink that introduces people to drinking other alcoholic beverages.

The phenomenal increase in beer production and consumption during the decade 1989 - 1999 is illustrated in the statistical table below.

Beer Manufacture in Litres (Million)

	1989	1996	1997	1998	1999
Ceylon Brewery Ltd		19.1	22	19.2	10.5
McCallum Brewery Ltd		3.5	4.6	4.1	3.3
United Brewery Ltd				4.8	5.3
Lion Brewery Ltd				11.6	22.8
Total	7.8	22.6	26.6	39.7	41.9

This increase is an outcome of a series of policy changes by the government that were favourable to and in support of the beer industry on the one hand, and the intense marketing programme of the industry on the other. In 1995, the excise duty on all beers was reduced by 70 per cent creating a new situation of demand exceeding supply. Two BOI projects approved by the government came into production in 1998. BOI stands for Board of Investment and such projects are given special tax concessions and incentives on investments with foreign collaborators.

The Lion Brewery Ltd., which is a BOI project, has become within two years of operation the market leader. The major shares of Lion Brewery are held by the Ceylon Brewery Ltd., which is the oldest brewery in the country, and Carlsberg Ltd. of Denmark, one of the first transnational corporations to have invested in the beer industry in Sri Lanka. The layout of the new plant has been designed for a six-fold increase in production from 300,000 hectolitres (i.e. 30 million litres) to 1.8 million hectolitres (i.e. 180 million litres) to cater for an expanding market.

With no restrictions on advertising, a well-orchestrated comprehensive advertising programme was launched in 1997/98 using all media. Neon signs, bill boards, huge wall spaces of building in prominent places, sponsorships of games and cultural events, tee shirts, key tags – anything and everything that could be used to promote the product - were used. The company even won an international award for the most successful campaign for launching a new product.

The use of the 'Lion' as brand name was intentional. Lion is the symbol of the nation and a symbolic lion is depicted in the nation's flag. The majority population in Sri Lanka is Sinhala, meaning the Lion's race. Deliberately a controversy was started by punning on the word's 'lion's race', asking the question 'Is there a Lion in you' in the advertisements. By this means the product was brought to the attention of the whole nation. The Minister of Government in charge of the subject of Cultural Affairs had to take cognizance of the widespread anger and protest at using the lion symbol in a product like beer. He wrote to the Company; but there was no response.

The industry was aware that a major factor that affected sales was the limitation of sales outlets. According to the regulations current in 1998, beer could be sold at licensed outlets along with hard liquor. The company was able to get the government to change the regulations to enable beer to be sold at restaurants under a special licensing scheme to be issued on the recommendation of the Ministry of Tourism. Since this change, restaurants have been mushrooming in the country and the outlets have more than doubled.

According to unofficial records the sale of beer in the year 2000 showed only a marginal increase to 42 million litres. The recent decision of Government of adding a third excise band for beers with less than 4per cent alcohol that could be sold at special beer outlets, to the existing two excise bands of less than 5per cent and over 5per cent, at the instance of the beer lobby, is to bring into being the necessary marketing environment for the industry to get to the next levels of production. There was no transparency in any of these actions and the people or the Ministry of Health were never consulted.

The only hope for temperance is grassroots action. Governments are failing the people. The profits of the industry have won over the social and economic development and the well being of the people.

Olcott Gunasekera is Regional Secretary, IOGT Regional Council for South and South East Asia