Jamie Oliver restaurant closures – did the celebrity chef bite off more than he could chew?

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Isabelle Szmigin, University of Birmingham

More than a decade after being launched with a great fanfare of publicity, Jamie Oliver’s restaurant group has been taken into administration with the potential loss of up to 1,300 jobs. One person unlikely to be redundant, though, is Oliver himself, as the 43-year-old chef and television presenter will almost certainly continue with his television work and the sponsorship deals and advocacy work that his celebrity has brought him.

It is easy to be cynical about celebrity enterprises, whether they are built on real skill – as in the case of Oliver – real talent or pure celebrity status, as in the case of the Kardashians.

Admittedly he was lucky in getting his break while working at the River Cafe in West London where a film crew was making a documentary and identified his chirpy TV presence as the next big thing in TV chefs. As one commentator remarked at the time:

While some have been par-boiling for decades, young Jamie had put in a mere soupcon of an apprenticeship before his star quality was spotted at London’s famed River Cafe. Take one lad, sprinkle with some clever sexy marketing, add wacky camera angles, and hey presto, a fully-formed superchef is born.

But Oliver was – and is – a natural on television. And he has used his undoubted star power as an advocate to try to get people to understand about healthy eating – especially for children and young people – and the importance of home cooked food.

Various popular food brands have leveraged off his popularity and credibility. But his latest association with oil and gas company Shell certainly caused a lot of comment – and in the current climate change debate, we doubtless have not heard the last of it.

The contradiction that he’ll be revamping the oil giant’s food offering is unmistakable to those concerned about climate change – he has been praised as an “environment champion” by the UN’s environment programme after years of campaigning, while Shell’s business plans don’t come close to doing what is required to address the climate crisis.

A lot on his plate

So enough of the man, what about his business skills? This is where it might be that the problem lies. While celebrities can and do move into other business for which they have not been trained – Victoria Beckham as fashion designer comes to mind – it is not an easy transition to go from being a TV personality to running what is effectively a large and complex hospitality business. While building a Michelin-starred restaurant such as Le Manoir aux Quatre Saisons requires high-end culinary skills, it is after all only one business. On the other hand, as Gordon Ramsay found, even having a few premium establishments is a tough business model.

Of course Oliver himself was not running the business on a day-to-day basis, but he was the driving force behind it and it may be that he did not have the experience or knowledge to recognise that a fashion for dining out is just that – probably temporary when the economy is on the up and people aren’t fearful for the future. At the same time people have been tightening their belts – literally and metaphorically – and while people are still buying food from restaurants, the number of people actually going on “dinner visits” is falling while the number of people taking advantage of the growth of food delivery companies is on the rise. For a branded restaurant chain like Jamie’s which is about the experience as much as the food, this is not good news.

When the business environment changes you have to be fleet of foot and either innovate your product – change it to meet the change in the environment – or at least drawback enough to reassess where to go next. The US restaurant market seems to be particularly good at this, for example, regularly remodelling one’s restaurant space and menu format. Fast expansion for a chain of restaurants is always risky, but – more specifically – here are some of the factors I consider to be key business problems for Oliver’s restaurant empire.

Hard to swallow

  1. The restaurant business is tough. Every day small independents are closing. That has been the case for as long as I can remember – and many new restaurants close in their first year of trading.
  2. The chain restaurant trade is newly highly competitive – over the last few years masses of new mid-market restaurants and cafes opened – Byron Burgers, Five Guys, Leon, Joe and the Juice and many more. The market is saturated and this is not like internet shopping where the world is your oyster – restaurants are service businesses that are geographically constrained. People have to get to them and every table not filled on a night is a loss.
  3. Mass marketing a premium product is difficult. This is what Oliver said about the vision he had for his restaurants: “We launched Jamie’s Italian in 2008 with the intention of positively disrupting mid-market dining in the UK high street, with great value and much higher quality ingredients, best-in-class animal welfare standards and an amazing team who shared my passion for great food and service. And we did exactly that.”

But these values come with a price and it isn’t a price everyone can pay and those that can pay, cannot pay every day. Mass-market restaurant chains are far cheaper to run and have a much bigger target market – think McDonald’s, Burger King, Greggs.

There is no doubt that a long stretch of economic uncertainty and low wage growth has been a factor in this story – but it cannot just be put down to that. Successfully running restaurants is hard and running a large number of them is a good deal harder. Being a brilliant young chef is one thing – running a business with thousands of employees and a multi-million-pound turnover is quite another.The Conversation

Isabelle Szmigin, Professor of Marketing, University of Birmingham

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Ramaphosa’s cabinet: who and what’s needed to end South Africa’s malaise

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South Africa’s President Cyril Ramaphosa won’t have free reign when choosing his Cabinet.

Seán Mfundza Muller, University of Johannesburg; Cheryl Hendricks, Human Sciences Research Council, and Mzukisi Qobo, University of the Witwatersrand

South Africans recently went to the polls in a national election which the African National Congress (ANC) won by a wide margin. The incumbent president Cyril Ramaphosa will shortly appoint a cabinet after parliament officially declares him president. Thabo Leshilo asked Mzukisi Qobo, Cheryl Hendricks and Seán Muller what he should focus on.

Given that Ramaphosa probably has less than five years in the job, what cabinet posts should be his top priority?

Cheryl Hendricks: He needs to leave a legacy and live up to his promise of a new dawn. He, therefore, needs to concentrate on a few things that will make maximum impact. These include changing the conditions that generate high levels of inequality, as well as those that have made South Africa’s state institutions dysfunctional and have reduced its international standing.

So his top priority cabinet posts should be basic education and higher education, economic development, finance, trade and industry, rural development and land reform, public enterprises, international relations and science and technology.

Finally, he needs to attend to the representation of women. South Africa has lost a lot of ground in the struggle to translate gender representation into gender equality and women’s peace and security.

Seán Muller: There are four main dimensions that could be considered: strategic institutions, policy direction, the effectiveness of the state and institutions for delivery. Ideally, Ramaphosa needs to pursue major improvements on each of the four dimensions in parallel.

What will be crucial in the context of rolling back the influence of state capture on strategic institutions will be who he appoints to justice and correctional services, police, state security, as well as the economics cluster (notably finance and public enterprises).

Then there are the posts that will be important in determining policy and delivery of social services. These include social development, health, education, water and sanitation, transport, and human settlements. Many of these are also important for economic services, along with departments like energy, mineral resources, communications, telecommunications and postal services, tourism and agriculture, forestry and fisheries.

Finally, there are departments that should play a key role in the effectiveness of the state itself. These include the departments of public service and administration, and cooperative governance and traditional affairs. Within the presidency, there’s performance monitoring and evaluation.

To the extent that prioritisation is necessary, Ramaphosa has to ensure that reform of critical institutions is placed first – for the simple reason that everything else will be compromised if this fails.

Mzukisi Qobo There are limits to Ramaphosa’s reform agenda in the next five years. For him to succeed, he will need to rely on highly competent technocrats to drive change within government, take bold and decisive action in reforming institutions early on, and take measures that may make him unpopular but have good results. For this to happen he will have to stare his party down and be his own man. The last time he put his cabinet together, his party constrained his options. The result was a watered-down compromise. He can’t afford that this time.

But it will be hard for him to find capable ministers. This is true even in the economic cluster, apart from Tito Mboweni in the finance ministry and Pravin Gordhan in the department of public enterprises. Yet the economy is an area that will likely define the next five years of his term (if he completes it). With unemployment at 27.6%, economic performance and job creation, in particular, will be yardsticks against which his success will be measured.

What attributes should he be looking for in these key positions?

Cheryl Hendricks: People with integrity, people who have leadership skills and people who have a vision for the positions they will be stepping into. People with fresh ideas to deal with old challenges and who are willing to do the hard work it will take to rebuild the country. He needs a cabinet with a healthy mix of experience and youthfulness and gender balance.

Seán Muller: A common error is to think that ministerial positions should be filled on the basis of area-specific expertise. This reflects a fundamental misunderstanding of the role of ministers relative to senior officials (like the director general of a department). Ministers serve a political function and need not have any particular expertise in an area.

What matters is a general level of competence, commitment to their mandate and the public interest, and respect for the separation between political and bureaucratic competence. A minister’s core functions are, arguably, to ensure that the officials leading the department are the best – technically and ethically – and that they are allowed and enabled to do their job.

Tito Mboweni will be hard to replace an Finance Minister.

Public confidence in the integrity of members of Cabinet is an intangible factor that is also important. But there’s tension between this and the challenges Ramaphosa faces within his own party. It is these that are likely to lead to the greatest compromises in cabinet appointments. Ultimately, it will do the country little good if he appoints the best Cabinet possible without factoring in party political considerations, only to then be so weakened within his party that he and his appointees cannot pursue the public interest.

Mzukisi Qobo: The cabinet is a reflection of the quality and depth of the governing party’s leadership bench, whose heft has been in decline over the years. Even the best of its parliamentarians will struggle to bring renewed energy to the job. Many of them are recycled, as they were part of the political arrangements in the last nine years of corruption and institutional decay under former President Jacob Zuma.

Read more:
Why the ANC itself is the chief impediment to Ramaphosa’s agenda

And, there is no evidence that they did much to ameliorate its damage. Some, such as Jeff Radebe, have been in government for two decades. There is no evidence of innovative thinking in their approach to governance.

Under such circumstances, Ramaphosa may find himself relying a lot on informal networks, especially business links, outside of government. But this could undercut his credibility among constituencies within the governing tripartite alliance.

Success requires a combination of experience, competence, integrity, and fresh ideas. This is particularly true in ministries such as the National Treasury, and those that interface with critical sectors of the economy such as agriculture, telecommunications, mineral resources, energy, and transport.

Since early 2018 there have been strong indications that Ramaphosa will overhaul the current structure of cabinet as part of an institutional reconfiguration of government. The low-hanging fruit will be to reduce the size of the cabinet. Even a country like China, 20 times larger than South Africa, has a cabinet with 24 ministers compared to South Africa’s 35. There is more emphasis on quality and meritocracy and less on viewing cabinet positions purely from the view of dispensing patronage.

Ramaphosa has a very difficult task ahead. Constitutionally, he can only appoint two individuals who are not members of parliament to his cabinet. That means he has to choose his cabinet from the list of MPs who are political fossils and were, by and large, part of the problem during Zuma’s administration.

The reality is that most MPs have a poor grasp of their oversight roles, are often out of depth on how government works, are under-prepared, and many see themselves as no more than deployees of the ruling party.The Conversation

Seán Mfundza Muller, Senior Lecturer in Economics and Research Associate at the Public and Environmental Economics Research Centre (PEERC), University of Johannesburg; Cheryl Hendricks, Executive director, Africa Institute of South Africa, Human Sciences Research Council, and Mzukisi Qobo, Associate Professor: International Business & Strategy, Wits Business School, University of the Witwatersrand

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Kontras wine tasting podcast


In our latest podcast, we taste a rewarding Stellenbosch Cabernet Sauvignon, the Kontras.

Michael Olivier orchestrates the tasting, while John Fraser does his best to disrupt proceedings.  The other tasters are Clientele’s Malcolm MacDonald, Gumtree Auto’s Jeff Osborne and economic superstar Mike Schussler.

Click below for the podcast:

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Mahindra: a great way to develop a gateway

Mahindra farm vehicles have landed in SA

By John Fraser

Sometimes clichés are valid. Just as Hong Kong has for decades marketed itself as the gateway to China, so, too, South Africa has its own gateway claim.

We boast when a multinational sets up its African HQ in SA, and sulk when instead the choice is, say, Lagos or Nairobi.

The ANC government has invested hundreds of billions of rand into the SA automotive sector, through a series of support programmes, with the result that we have some of the best assembly plants in the world. Now the focus is on boosting volume and local content, as well as exports.

Nissan is doing well in developing not just its SA operations, but also in devising an African strategy. It is not alone.

Of course, not all the auto sector is taken up by the four-door family car.

At its Durban plant, Mahindra is expanding production of bakkies, or pickups, eyeing the African market.

It has also just launched a range of farm vehicles in SA, and as the world’s largest tractor manufacturer, we can see it ploughing its way through the region.

There is some export support for vehicles which are made in Durban, but the real incentive dosh will come when local content is boosted and output reaches higher levels.

Expansion is certainly on the cards, helped by the certainty which is provided by the new government support strategy for the auto sector, known as the Masterplan.

With South African as its chosen gateway into Africa, the Indian company is not just moving from traditional vehicles into tractors, which could, in time, be produced in Durban, but might also expand into production of generators. Certainly, Eskom’s failures should generate a good generator market for some time to come.

With the election behind him, President Ramaphosa will undoubtedly build on the investment drive he launched last year.

He could do worse than trot out the gateway cliché a bit more often.

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South Africa’s poll is more about battles in the ANC than between political parties

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Former president of South Africa Jacob Zuma and current president Cyril Ramaphosa are supported by different factions.

Steven Friedman, University of Johannesburg

South Africans are about to vote in the most competitive election they’ve had since democracy began in 1994. But, despite this, the poll will have far more impact on the factional battle within the governing African National Congress (ANC) than on the contest between it and other parties for control of the government.

The election follows a decline in the ANC vote from just under 70% in 2004 to around 54% in 2016’s local elections. This seemed to signal that the ANC was no longer guaranteed re-election nationally and in most provinces. There has been much talk of the ANC vote sinking below 50%, forcing it to seek coalition partners if it wants to govern.

In Gauteng, the country’s economic heartland, the ANC won only 46% in the 2016 municipal elections and was forced into opposition in two metropolitan areas – Tshwane and Johannesburg. This happened because the Economic Freedom Fighters (EFF), a breakaway from the ANC which espouses a more militant brand of African nationalism, agreed to support the country’s second biggest party, the Democratic Alliance (DA), even though they differ on just about everything. This raised the possibility that a similar arrangement this time will mean the ANC will no longer govern in Gauteng or nationally.

So, is South Africa about to see its first election in which national power changes hands? No. The ANC is almost certain to remain in government in all the eight provinces it controls, including Gauteng. This will leave the Western Cape, which the DA holds and is likely to retain despite claims that it is in trouble, as the only province in which the ANC is not in government.

This prediction is not based on opinion polls which, in this election, have continued their tradition of doing more to confuse than inform. One poll has the ANC at 61%. Another says it is on the cusp of losing its majority. The DA’s projected vote veers just as wildly. The only constant is claims that the EFF will improve although this is not what is happening in municipal by-elections, where its support remains largely unchanged.

So, the polls tell us little and there is a good argument for ignoring them. But they do have one use. They largely agree on what won’t happen: the ANC won’t lose power.

Why the ANC is sitting pretty

Predicting that the ANC will remain in government outside the Western Cape is based on political common sense.

Talk of the ANC dropping below 50% often ignores the reality that, just about everywhere, the opposition is far behind it. The nearest an opposition party comes to challenging it outside the Western Cape is in Gauteng where the DA won 37% in 2016. Elsewhere, the nearest opposition party trails by 30 percentage points or more. The only way the ANC could be removed as the party of government is by another deal between the DA and EFF.

But EFF leader Julius Malema has said that it will not make a deal with the DA and is more likely to look to a coalition with the ANC. What politicians say about coalitions cannot always be taken seriously and later Malema said the EFF would consider a coalition with the DA or ANC if they agreed to improve conditions in the townships where black poor people live.

But a DA-EFF coalition seems impossible, whatever Malema says now. For one thing, their positions on land, a core EFF concern, are diametrically opposed. This does not matter in local government, which does not decide on land policy. It would matter hugely in the national government and to a degree in the provinces.

If there is no DA-EFF deal, the only way the ANC can lose its hold on government anywhere is if either party wins a majority or at least enough to allow them to govern with small parties. But in Gauteng, no poll puts the DA above 38% – its numbers elsewhere are much weaker. In North West province, the ANC’s weakest outside Gauteng and Western Cape, the EFF is the second biggest party and it won only 16% in 2016. No poll has the EFF vote improving by more than eight percentage points.

ANC factions

Nationally and outside the Western Cape, then, two results are possible: the ANC wins a majority or is by far the biggest party and the only one able to form a coalition.

The reality which predictions of a change in government ignore -– the absence of another party which could defeat the ANC – means that, even if the ANC does as badly as one poll says it will, it will still be the party of government just about everywhere.

But, while the election will not change the government, it may change the balance between the two factions which compete for power within the ANC. -– One supports President Cyril Ramaphosa; the other backed former president Jacob Zuma.

The Zuma faction is still strongly represented in ANC decision-making forums. The battle between the two factions continues and the difference between them is often greater than that between the ANC and parts of the opposition. It is impossible to make sense of anything the ANC does without knowing which faction was behind it.

Ramaphosa was elected in 2017 because key ANC figures, most notably current deputy president David Mabuza, believed the ANC could not win this election if it was led by the Zuma faction. Ramaphosa’s credibility with some ANC power brokers depends, therefore, on showing that he can stem the ANC’s decline at the polls.

If the ANC improves on its 2016 vote, Ramaphosa will have presided over the first increase in its vote for 15 years. This will greatly improve his chances of winning re-election as ANC president at its next conference in 2022 because it will signal to ANC politicians that he can deliver more seats.

Because many South Africans are excluded from the benefits of the market, seats in municipal councils and legislatures are often the only ticket into the middle-class. So, an ANC gain in this election is certain to strengthen Ramaphosa now and in 2022 by showing that his leadership offers more opportunities to ANC politicians.

Even if it matches the last result or comes close, ANC power brokers could decide that Ramaphosa saved them from the opposition benches.

If the ANC drops to near 50%, whether Ramaphosa would be at risk of losing in 2022 would depend on whether ANC delegates could be persuaded to blame Zuma and his supporters. That is hardly assured. What is clear is that the worse the ANC does, the better the Zuma group’s chances are of removing Ramaphosa at the national conference in 2022.

The two factions have very different approaches to governing and so the battle between them affects the country’s future. It is this battle, not that between the parties, which will be shaped by the election result.

This article was updated to reflect the correct date for when the ANC could remove Ramaphosa if they chose to do so.The Conversation

Steven Friedman, Professor of Political Studies, University of Johannesburg

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Wine tasting podcast: Aristea Méthode Cap Classique Rosé 2016


Michael Olivier kicks off our podcast with a Cape bubbly, the Aristea Méthode Cap Classique Rosé 2016.

John Fraser tries to keep order with invited tasters, who are economist Mike Schussler, Jeff Osborne from Gumtree Auto and Clientele’s Malcolm MacDonald.

There is also a pre-election chat about the ANC’s slightly scratched economic record.

Check out the podcast:

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So what if you are offended? Don’t support the censorship of Steve Hofmeyr.

Steve Hofmeyr has every reason to frown

By John Fraser

Racial concerns, fear, paranoia and justified outrage are still a part of everyday life in SA and are likely to stay so.

Just as many of we whites find offensive and scary the racist rants of little Julius Malema, so, too, do many blacks feel that Afrikaans singer Steve Hofmeyr projects an anti-black, racist persona. Both have been labelled racist. For all I know, either – or both – may have a strong case to answer.

This is understandable, such concerns are not unique to South Africa, and I will not pretend to know the deepest thoughts of these two controversial personalities, however much they may or may not turn out to disgust us all.

What I do know is that just as it is so, so easy to criticise, to punish, to bully, to censor, it is also so, so dangerous.

We all know of the vile behaviour of actor Kevin Spacey, but I am not sure I wanted him booted off our screens. Call me selfish, but I think the last series of House of Cards was far worse without his menacing portrayal of a deeply corrupt politician.

And I fail to see how any viewer watching this prog or any other of his superb performances should be accused of approving his sexually predatory private life. Art is art, and groping is not.

An even more repellent showbiz type Harvey Weinstein is rightly in the Hollywood doghouse, but I suspect western culture would be much worse off if we were to pull the plug on all the productions with which he has been associated.

If he has done all he has been accused of having done, he should be locked up. His sweaty porky paws and protruding penis are vile. But if we were to delete, censor, obliterate every work of art created by someone whose character or utterances or sexual predation or racist views are offensive….who would be left?

MultiChoice, you bullying shits, you cannot be so selective in targeting Oom Steve.

Perhaps you have not always behaved 100% ethically yourselves, you have not always broadcast the finest art, the noblest creations of man and woman, and it is a disgrace that your hounding and censorship of all past and future output of one of this country’s most popular singers should go unchallenged?

I have little interest in much of the material broadcast by these satellite sods, but I do subscribe so I can access the stuff that interests me.

The more the competition is allowed to thrive, the closer I will come to cancelling my monthly subscription.  I eagerly await the day when I can cease to take it and can leave it.

After all, I am sure I could buy stacks of Steve Hofmeyr CDs, DVDs and concert tickets with the money I will save.

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Wine podcast: a francly excellent Cab Franc

A legend on two legs and a robust walking stick Michael Olivier joins us for another wine tasting and chat.

The wine on offer is a Cape red, The Garageest Bruce 2015, which is a Cabernet Franc.

Joining Michael and John Fraser in the studio are analyst and writer Chris Gilmour, Gumtree Auto’s Jeff Osborne and Clientele’s Malcolm MacDonald, who also handled the recording.

Click here for the podcast


Don’t steal books; buy them.

By John Fraser

The fine folk at Penguin (the publishers, not the ones with the funny walk) deserve to be taken seriously.

They are threatening legal action against a few obscure politicians who think it normal to advocate theft. Not that we have never before seen the words politician and theft in the same sentence.

There is what I believe to be an excellent book, which I have every intention of purchasing for real money, called Gangster State, which alleges that a very, very, very senior ANC politician is a crook and a swindler.

Not yet having read it, I shall have to rely on my instincts. That it is pretty close to the mark. I stand to be corrected, but do not expect to be.

This is what the publishers had to say:

“Penguin Random House is appalled by the ongoing illegal distribution of a pirated PDF of Gangster State, which is widely being disseminated on social media. It is of even more concern that prominent individuals appear to encourage this unlawful activity.

“The distribution of pirated copies of Gangster State by Pieter-Louis Myburgh infringes our copyright as well as that of the author, and it is unlawful in terms of the Copyright Act of 1976.”

The problem, though, is that piracy is rife. I wrote recently about the demise of the DVD and Blu-ray. I, like so many others, have built up a collection of movies, concerts, comedy shows. Many, many of them.

These days the resale value of a pre-owned disc is tiny, with that of a CD even lower.

This is not the point, though. I own these discs. I paid for them. I can watch them when I choose, lend or sell them when I choose. And when I made each purchase, in almost all cases the artist/s got some cash.

Where I might have been tempted by pirated content, it has almost always been because the people who hold the rights to whatever I wish to watch and listen to are not publishing and selling the stuff. Their fault, I would argue.

I am currently reading an excellent book, the first for a while. I paid for it, even though it is in electronic format.

I read it on my iPad, on the Amazon Kindle app. And I own this copy, although what will happen to it when I no longer (dis)grace you all with my presence is concerning.

The physical books I own can be disposed of, will retain some value, and some are really worth reading. Especially the cartoon collections.

But back to the Penguin problem. I fully condemn those who advocate the theft and then diffusion of printed works, recordings and any other material which they do not own and which have not been given to them.

Just remember. If it no longer becomes viable to expose and then publish details of the rampant corruption, looting and hypocrisy of our rulers, then we will all be the poorer.

Don’t support those who wish to deny an honest author a decent living.

Buy this bloody book, and many others.

It will make you a better person in so, so many ways.

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Regulation of Airbnb is draconian

By Chris Hattingh

Government published the Tourism Amendment Bill on April 12. If this had happened on April 1, one could have believed that it was an April Fool’s Joke, so comical is the logic underlying the bill. The amendment, once adopted, will mean that all ‘short-term home rentals’ are legislated under the Tourism Act. 

The thinking behind the bill is so misguided that it will also allow the Minister of Tourism to specify certain ‘thresholds’ for Airbnbs in SA; these thresholds could include a limit on the number of nights a guest can stay in an Airbnb, or even how much income an Airbnb can earn.
This proposed amendment is draconian – it grants the Minister too much power and severely limits the income and job opportunities people can generate for themselves and others through establishing an Airbnb hosting.

A spokesperson for the Department of Tourism told BusinessTech that: “These thresholds are not about being hard on (Airbnb) owners but making sure that everyone gets their fair share”. It is far, far removed from the moral remit of government to decide who gets their ‘fair share’ of anything; by what measure does the Minister, or representative of the Department, decide what constitutes a ‘fair share’?

As always with these laws and edicts by government, the measure by which government decides who wins and who loses is left out of the discussion.

The philosophy behind this bill indicates that the Department views itself as the judge and jury of what you are ‘allowed’ to earn as an Airbnb host.

What you earn as a host should be completely up to the rate you set and agree to with your customers, the demand for the accommodation you offer, and the quality of service you render.

To presume that a government department must ensure that each bed and breakfast earns their ‘fair share’ indicates a fundamental lack of understanding of the nature of business, and of wealth, which is: Each person is not entitled to a slice of the economy; wealth is created by each person, for himself.

Each person’s wealth is his own pie, to increase or lose based on his own decisions and choices. For the Department to place itself in the role of wealth ‘granter’ clearly shows that the officials who work there are completely ignorant of the concept of wealth; wealth is made, not granted or given.

Airbnb has enabled people previously unable to do so to make a living for themselves.

Just as Uber opened up a whole new market for people in transportation, Airbnb has the same transformative potential in tourism.

South Africa’s tourism is one of its last remaining and strongest selling points for foreigners to travel here and spend their international currencies. Anyone who tries to establish and run an Airbnb, just like a bed and breakfast, should be praised for the success they manage to attain.

Taxes increase year on year; the price of petrol goes up, and, with it, the price of food. People are struggling to make a living and now the government is going to make it yet more difficult for those who are trying their utmost to improve their lives.

If a customer decides to stay in an Airbnb instead of a ‘traditional’ B&B, that is because they think they can get more value for their money at the Airbnb. It is each customer’s free, voluntary choice to trade with the establishment of his choice.

And it is up to each Airbnb host and all other establishments to make their product as alluring and competitive as possible. Every business, whether it is an Airbnb or any other, must stand or fall on its own merits, without government favour.

If the Department of Tourism is truly concerned for the welfare of traditional establishments, it could remove restrictions on those businesses to make it easier for them to compete with Airbnb hosts. Once government regulates some businesses over others, it distorts the market and any potential for supply and demand to interact as they would in a free market.

This, in turn, distorts prices for consumers and they will suffer in the long run. Furthermore, if any traditional B&Bs are calling for regulations on Airbnb, they must know that such a request is deeply immoral.

To call for government force against one’s competitors indicates that one is unwilling to earn the customer’s money; these older establishments already have an advantage over new entrants because they are well-known. They are playing a very dangerous game; government can very quickly turn its expanded regulatory powers on any target it deems ‘too big’ or ‘earning too much’.

This Bill is an attempt by government to punish successful people who are working hard in an effort to better their lives.

You do not encourage economic growth by imposing regulations; you encourage economic growth by removing as many regulations and restrictions as possible.

Chris Hattingh is a Researcher at the Free Market Foundation

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