The importance of having a loud, forceful and effective business voice cannot be overstated. Whether it is on issues like the rolling electricity back-outs which are hitting South Africa, the planned Carbon Tax, barmy booze legislation, or persistent concerns about crime, there is a lot that government needs to fix.
So it is a bit strange that the most important business grouping – the SA Chamber of Commerce and Industry (SACCI) – has been without a full-time CEO since the departure of Neren Rau at the beginning of the year. His colleague Peggy Drodskie has done a fine job at filling in as acting CEO. But for SACCI’s voice to be forceful, it needs to have a full-time leader. So we welcome the news that a new CEO has been appointed.
We did try to attend the announcement, but left early in irritation at the boring old chap who was oblivious to the fact that he is the only one on the planet who enjoys the sound of his own voice, and droned on, and on, and on, and on……. Our premature departure meant we missed a presentation by our Nedbank Economist chum Dennis Dykes, which is a shame.
However, we are grateful to our journo chum Angelo Coppola (@angelo2711), who tweeted the news that Alan Mukoki is the new SACCI CEO. He has some experience, having run the Land Bank, but a background in the public sector may not be the best qualification to lobby on behalf of the private sector. We know his predecessor Neren Rau came from the Treasury, but this was probably more a disadvantage than an asset in his dealings with government. However, hopefully the new black SACCI boss will be able to perform well.
Certainly, there are signs that government is not getting the message from business – on issues like liquor laws, visitors’ visas, and a host of other issues.

Tweet of the Day:
Bruce Cooper (@BruceRelates): The love of books is among the choicest gifts of the gods. ― Arthur Conan Doyle

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Leon Louw of the Free Market Foundation has warned that planned new ZA liquor laws would make it almost impossible to sell the stuff, and would reverse all the reforms we have seen since the toppling of apartheid. He gave a very lengthy lecture to the media about the plans, and urged everyone to register their opposition to the Trade and Industry Department (dti’s) draft and daft legislation. Here are a few highlights from his talk.

– ANC in opposition was for tolerance and human dignity. That has changed, with intolerance, authoritarianism, puritanism, control, restriction, disrespect for human choice, erosion of civil liberties. This is a shift back to the past. The liquor laws were drafted by the ghost of Verwoerd.
– Soon we will be following N Korea with daily compulsory exercise (joke).
– Apartheid liquor policy was controlled by this same law which is being amended.
– Total prohibition on liquor sales to black South Africans until early 1960s.
– In the new SA there is a tolerance of taverns and shabeens. Now it is proposed that zoning will happen, making it impossible for a lawful liquor outlet to operate.
– Restriction of advertising will hit the consumer, and there will be a barrier to new entry
– This measure is close to a full prohibition of liquor throughout SA. May mean no lawful liquor trade in SA.
– We support education and awareness
– Proposals say there should be no trade within ½ km of schools. Same with places of worship – means the end of communion wine? Is there somewhere in SA which is ½ km from all of these? It includes rehabilitation centres, recreation facilities. So no licence for bowling clubs, sports stadiums. Or for residential areas. This will affect hotels and restaurants. Also mentioned in the draft law are public institutions – but these are not defined.
– Also not near petrol stations or public transport – a bus route? An airport?
– Did whoever wrote this think about it? It is a weird set of provisions.
– What about hotels? The hotel is liable if anyone gets drunk there.
– Same with black areas.
– Current legal outlets will have two years to close. But what if you operate legally and someone opens a church, establishes a bus route?
– This will have the opposite effect of promoting the entry of black South Africans into the liquor industry.
– The restriction of no sales to under 21 year olds is bizarre. I have been to Indonesia, and it is as if their restriction has disappeared. In SA this law will be ignored. This is a patronising and odd thing.
– Advertising and marketing will be restricted or banned.
– Unintended consequences include disruption to the catering industry, to small business. There are also constitutional issues. This would compromise human dignity.
– The obvious alternative is complete deregulation.
– We may see new restrictions on tobacco, sugar, salt, fast food and cars.
–
Conclusion:
A lot of sense was spoken by Lowe, and his message would have been clearer if it had been double distilled, as he did tend to ramble a bit and then opened the floor of what was supposed to be a press conference to a series of tedious lobbyists. The hosts offered coffee and fizzy drinks, and no booze, but fortunately the ZA Confidential First Aid Kit (a hip flask of gin) was at hand.

Tweets of the Day:
Bill Murray (@BiIIMurray): I’m not saying I’m old and worn out, but I do make sure I’m nowhere near the curb on trash day.
Georg Grey (@Georg_Grey): How many surrealists does it take to screw in a light bulb? A fish.

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We can go a bit silly about fashionable brands. Now, I have drunk Starbucks coffee on several continents, and while it was at times an enjoyable experience, I have often found it weak and over-priced. So while I will watch with interest to see the quality and affordability of the new Starbucks shops which Taste Holdings will be bringing to ZA, I worry about the success of the venture.
Taste is already involved in court battles with a group of businessmen who believe they instead should have won the franchise to bring Domino’s Pizza to ZA, and I have written about this recently on ZA Confidential. It is no surprise that the winners of the pizza prize have also been awarded the coffee cup, as the two brands often go hand in hand in global franchise agreements, or so my friends in the food trade tell me.
Starbucks is unlikely to want to shed its premium status in the roll out in the ZA market, so I would expect Taste to target the affluent consumer – the type already being well served by the Seattle Coffee Company brand, which has for long been our local leader in fine coffee provision, at least as far as I am concerned, and which I believe took a lot of expertise from the US model. Were Seattle able to also offer hot food at breakfast time, I am convinced it would have an even brighter future, and would easily grab market share from many of the rival outlets which may know how to boil an egg, but have yet to produce an impressive cup of coffee.
Has Domino’s triumphed yet in the ZA market? I have tried their pizzas and they are good, and I would like to think their frequent promotions are just good marketing and not a sign of sluggish business.
Of course, the Starbucks experience is more than just about coffee. I have been known to linger over a few coffees for some time in the mornings in my own favourite coffee shops, taking advantage of the free wi-fi. If local Starbucks outlets can replicate this experience with a welcoming atmosphere and efficient staff, then they will attract a following. And I think that the trend in other countries to also offer wine in the evenings at Starbucks outlets is one we should hope for in SA, expecially given the scarcity of good local wine bars and the variety of superb local wines.
But do get it right. I have just had my first coffee of the morning in a Sandton coffee outlet attached to a Virgin gym. It was not nice. I did recently refuse to order coffee there for some weeks because it was not nice coffee, but wanted to see if there had been much improvement. Why they can’t get this basic offering right eludes me, as so many others do get it right.
The ZA Starbucks coffee shops cannot afford too many teething problems, especially as they will be likely to price their coffee well above the rates of the many fast food chains. Word of mouth and social media can do wonders for a new business, but can also kill it.
Starbucks is a brand which has been out of the ZA market – except in a few outlets such some Tsogo Sun hotels. Its real arrival will be welcomed, as is shown by some of the more hysterical media reaction to the announcement of the Taste franchise deal.
But, for me, the proof of the coffee will be in the drinking.

Tweets of the Day:
Famous-Quote.net (@famousquotenet): Democracy must be something more than two wolves and a sheep voting on what to have for dinner. – James Bovard
Mick Carter (@big_mick_carter): “Ladies & Gents.” Well, that concludes our tour of the toilets.

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I was quite good at maths when I was at school, but these days I sometimes find it difficult to comprehend large numbers. Hence my bafflement with an announcement at the Manufacturing Indaba this week by deputy dti Minister Mzwandile Masina. The Deputy-Minister told the conference that government has set a target of R100 billion to support its Black Industrialists (BI) programme.
Now we have been told that this is designed to transform South African industry, due to a concern that there are too many white faces, and too few black ones, at the top of SA manufacturing. Government’s target is 100 new BIs. A great plan, seemingly.
But wait a minute! Even with my fading mathematical skills, if this means they will be spending R100 billion for 100 BIs, then public spending will be at a rate of R1 billion per BI.
Of course, that is splendid news for the 100 BI candidates, whose enterprises will be projected to a level of prosperity which will make the average lottery winner seem like a poverty-struck peasant in rural KZN. (Nkandla residents are self-evidently excluded from this analogy).
Government plans to accomplish its BI billionaire boost by focusing State grants and incentives on black candidates, by making them better beneficiaries of public procurement, and so on.
Of course the success and justification for this scheme begins to crumble when one considers whether or not government is best placed to pick winners in business, and when wonders how many of the winners from this scheme will be closely connected to President Zuma and his ANC. The Deputy Minister did give an assurance there will be no nepotism or cronyism, but when there is a budget of R100 billion, temptation may over-ride integrity.
It goes without saying that we welcome every effort to foster the emergence of capable, entrepreneurial, successful – and black – business leaders.
It just seems that this R100 billion plan is going to cost the rest of us a hell of a lot.

Tweets of the Day:
Stephen Grant (@stephencgrant): My new thesaurus is not only poor, it’s really poor. Very very poor.
Mark Twain (@TheMarkTwain): It usually takes me more than three weeks to prepare a good impromptu speech.

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We journalists often get a bad press. There is an assumption that all we want to do is to highlight the bad – and certainly that is part of the job.
However, it is sometimes nice to also report on the good, the positive.
So, it is time for a short word on an important announcement this week from Toyota SA, that there is now a new assembly line in Durban, building the commuter taxi.
The assembly of the Ses’fikile minibus taxi follows an investment by Toyota of more than R476m.
In essence, Toyota has moved from just assembling what they call semi-knockdown kits (SKD) to the full manufacturing of the minibus taxis.
Toyota had an official plant opening on Monday, to which our invitation appears to have been lost in the post, attended by our two most active communist Ministers red Ebrahim Patel and red Rob Davies.
Government is busy reviewing its current incentive support scheme for the automotive sector, and this sector has been identified as one which can lead a revival in local manufacturing.
Certainly, it is the best at lobbying government, as the billions of rand a year it receives in government support dwarfs the level of assistance which is given to all other sectors.

Tweet of the Day:
Prince Charles (@Charles_HRH): Dear Oxford English Dictionary, ‘Twerk’ is not a new word; that’s where people from Yorkshire go in the morning. Regards, Charles.
Famous-Quote.net (@famousquotenet): A government big enough to give you everything you want is a government big enough to take from you everything you have. – Gerald Ford

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There was much speculation in August 2013 when former Sasol CFO Christine Ramon’s speedy departure was announced. Did she jump? Was she pushed? And if the latter, was it down the stairs?
And now the same sort of speculation has arisen with this week’s announcement that Sasol CEO David Constable will not be renewing his contract beyond its expiry in a year from now. The departure of the Canadian CEO will, on the positive side, give a good period in which to find a replacement. So will this allow Sasol to appease its critics and appoint its first black CEO? While most shareholders would, no doubt, welcome the job being allocated on merit, there are powerful and influential shareholders in Sasol such as the IDC, the PIC and the Government Employees Pension Fund who have a far greater political agenda, and who would no doubt encourage the energy giant to make a BEE appointment. Indeed, when our President Jacob Zuma and his team were recently advocating the creation of 100 new black industrialists in South Africa, they mentioned the way in which Sasol and other entities were fostered by the apartheid regime – to help transfer ownership of the economy from the English colonial bunch to a bunch of Afrikaners. If this analogy is to be extended, and there is a mightily strong parallel, then the top job at Sasol is the ideal home for a new black industrialist. He may even get free company petrol if he negotiates his contract wisely.
Constable is not leaving the company after he steps down from the CEO seat, but will act as a consultant. While a bit of handholding for any replacement, black or white, will be wise, this might be an indication that a black candidate might land the job even if he (she?) needs a bit of time and help to fill Constable’s size 11 shoes. (Actually, I don’t know his shoe size, but it helped me to round off the sentence with more than the usual consistency).
However, this might not be the case at all. A Sasol spokesman told Business Day that a “strong desire” from Constable’s family informed the Canadian executive’s decision to return to North America.
If so, it is worrying. Was it a matter of personal safety? Is it just a cultural issue? The top job at Sasol is extremely well paid, so they are clearly not leaving because the cash is running out.

Conclusion

Whatever the true reason for Constable’s decision to step down (if it was indeed his decision) it is a shame. I have attended some of his briefings, and have interviewed him, and while I suspect he might not be the easiest person to work for, he has had a clear vision for Sasol, and I doubt that most (private sector) shareholders will be keen to see him leave. I shall watch developments closely.

Tweet of the Day:
Steve (@WigCannon): I’ll bet the guy who invented socks couldn’t wait for feet to be invented.

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I have written often about poorly organised events, where the food has been awful and the wine has been absent, so it is only fair to shower with praise my chums at Tsogo Sun, who organised a magnificent media wine tasting this week. Long my favoured hotel chain, it was great to see a combination of generosity and welcome – the sort of thing you can see in adverts, but which is not always delivered.
The event at Montecasino was well attended, and was designed to showcase some of the special bottlings which had been purchased by the hotel chain at the Nederburg and Cape Winemakers’ Guild auctions.
When arriving we were greeted with generous glasses of perfectly chilled Veuve Clicquot, and these were topped up a lot. Tsogo Sun has a policy to put smaller than normal mark-ups on its Champagne, but I am sure the Die Vine Intervention team put a further hefty dent in their profits as we had one refill after another. My mate Norman and I met another chap called Norman, who was our host, along with the brilliant Miguel Chan, who has the rotten job of being Tsogo Sun’s group sommelier.
Bubbling over with bubbly, it was time to taste the auction wines. Now these events can be a bit daunting, with tasters seated like kids in class, as expert after expert tells them about the few sips which are in each glass. Not so at Tsogo.
The room had several tasting platforms, each with a pourer and a neighboring food stand. Each had its own wine, and the food dishes had been expertly paired with each wine.
I did not note down all the wines, as I was too busy guzzling (and there was no crib sheet) but did have a favourite – a 2009 Nederburg Private Bin cabernet sauvignon. This was paired with thin slices of beef, topped with the best béarnaise sauce I have eaten outside Europe. The cheese came with a vintage Monis Port which was also divine.
True to form, I found the most pricey wine – a Shiraz – was my least favourite, but nothing was bad.
The lay-out meant that one could mingle with other guests, who included vintage socialite Edith Venter, another lady who introduced herself as a runner-up from big brother, and several journalists. The atmosphere was fun, and this was because care and professionalism had been deployed in the planning
We weren’t hurried, we ate and drank far more than was wise, and they even gave us a bottle of the cab as we departed.
So bravo to Miguel and team for showing true hospitality, and for generously demonstrating that Tsogo Sun, which is a leading bidder in ZA wine auctions, has some real gems with which to pepper its wine lists.

Conclusion
It would be wrong for me to gush too enthusiastically about the tasting event, as there were a few things I would have changed. While I was thrilled to renew my acquaintance with the Clicky Widow, I wonder whether it might have been more apt to serve us a really brilliant local bubbly? There are many of these and Miguel know them all. Then the selection of cheeses was magnificent, but I believe many were imported. I am convinced that we could have had a range of locally-sourced cheeses, which would have been even better, and would have kept to the theme of showcasing local excellence. And then there was the Scottish salmon…..

Tweets of the Day:
PUNS (@omgthatspunny): A bicycle can’t stand on its own because it is two-tired.
Male Thoughts (@SteveStfler): Diets are hard because I get hungry.

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President Jacob Zuma has been spending a lot of time in Russia. Geographically, our two countries have little in common, although there is no reason why the much-criticised Russians should not be lapping up South Africa’s fine wines and produce by the imported container-load, and cooperating on mining and energy projects.
Certainly, there are massive opportunities for Russia to cash in on SA’s planned nuclear programme, with opportunities for graft and facilitation fees which will make the current FIFA scandal look like a storm in a vodka glass.
But a chat recently with one of our leading South African entrepreneurs gave me an insight into what may actually be happening below the surface. And it’s scary.
Last year I did a lot of work editing a new book on the BRICS (Brazil, Russia, India, China and South Africa). ‘Halfway There’ is an excellent read for a number of reasons, as co-authors Chris Hart and Glenn Silverman of Investment Solutions are two of the brightest people I have ever met, and were able to draw on their own visit to Russia to analyse and understand how each of ZA’s BRICS partners works. Or doesn’t.
A key economic development in Russia has been the emergence of a class of Oligarchs. Small in number but big in wealth, these people emerged in the chaos that accompanied the fall of Communism and the rise of capitalism, cashing in on numerous opportunities as state assets were switched to, or stolen by, the private sector. Many dirty tricks and much villainy appears to have accompanied this process, and there is no doubt that Vladimir Putin is very close to most of these people. If he favours you, you will prosper; if he fails to favour you, then you had better be fearful.
A bunch of powerful businessmen with a ruthless streak, with immense power and patronage, beholden to a protecting President. Where have we heard of that before?
Switch to Midrand a month or so ago, when I last saw President Zuma in the flesh.
He was pushing ahead with a plan to transform the (mainly-white) face of ZA industry, by fostering the emergence of 100 new Black Industrialists (BIs).
A benign interpretation of the President’s plan would see many dozens of worthy, talented people being helped up from the trenches, becoming our new black Captains of Industry. The example was given at the conference of the way in which the apartheid strategists of this country sought to eclipse the colonial heritage of English entrepreneurs and industrial giants, by encouraging the growth of Afrikaans-led industrial giants. Sasol and Iscor were two of the best examples of this.
What may happen when the white dominos fall and the black ones are stacked up? Well, if JZ has been learning anything from Putin’s undoubted personal success, which is believed by some to include self-enrichment beyond the dreams of the Czars, he will been impressed by the role of the Oligarchs. What might be disturbing, then, about the perfectly understandable plan to transform the business landscape of this country, making room for these cohorts of BIs?
Well, if the cynics are to be believed, political favour comes at a price. When our President travels with delegations of businessmen, they can often be categorised as Friends of Zuma.
What would be more natural than those fledgling BIs who are to be supported with billions of rand of taxpayers’ money being picked from the (fire) pool of Zuma’s buddies? And what would be more natural once they have been elevated to immense wealth, wisdom and influence if they were to show their gratitude? By helping out a President whose appetites far exceed his income? The era of the BI Oligarchs may be just around the corner.

Conclusion
I often hear of cuts in this county’s newsrooms, and this fills me with despair. Even the most talented hacks will fail to get ideas, inspiration and scoops if they fail to get out and about. The best bosses and editors understand this; the cash-conscious often fail to fund journalistic jaunts, with a shortness of sight and budget which is disgraceful. The ideas above are not all my own, but stem from conversations with people who are at the coal face of business. Long may my own conversations with these people – black and white – continue.

Tweet of the Day:
Mike Levington (@navitassa): I would love to see the list of “black industrialists” that have been anointed by the SA government.

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ZA Confidential reported earlier this week that the Financial Services Board has been asked to investigate suspicions of insider trading around the agreement that Taste Holdings reached with Domino’s Pizza to bring the US fast food brand to SA.
So what is the fuss all about? Why does Taste want a slice of the pizza pie?
It was quite a coincidence that in the same week as I attended a Taste presentation, at which we were updated on Domino’s arrival in SA, a flyer came through the letter box suggesting there was a new pizza outlet near my home. I had to give it a go.
In fact, it gave prices but no locations, so I had to look up the number online.
After five phone calls, I finally managed to get a sales lady who could hear me, and with a further two calls back to me from her, I managed to place my order.
However, she was not aware of price of the promotion I was ordering, and it later emerged that she had failed to spell my street name right. A far more efficient supervisor took over, I had to place the order yet again from the start, but it got better after that. The pizza was delivered in good time, was still warm, and tasted OK.
I assume that once this new outlet has settled down, it will get better phone connection and put people on the phone who are properly trained.

Conclusion
Of course, this was just one transaction, with dozens of Domino’s outlets being rolled out. At the end of this month, there will be 32 stores; at the end of August this will have almost doubled to 62. This business will be highly profitable. They don’t sell steaks, but the stakes are high.

Another Fun Tweet:
Sarcasm (@TheFunnyTeens): you’re as relevant as the letter “K” in knife

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