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Want to include liquor in your startup’s product range? Here’s what you need to know
Rob Heyns started The League of Beers, one of South Africa’s leading online suppliers of local and international craft beer. We asked him for his thoughts about what to expect when running a startup in South Africa that includes alcohol in its product lineup.
If you’re keen to start a liquor business, you need to be able to do two things:
- Define your business
- Define your place of operation.
The type of business and the location are the most important things when applying for your license. And without a license, you can’t sell or produce anything legally.
Your major options for types of businesses are:
- Producer
- Distributor (and warehousing and wholesale as well)
- Retailer
- On-consumption (bar, hotel, restaurant)
A regional licence is what you’ll need to apply for as a producer, on-consumption or retailer business. And distributors need to apply for national licenses. However, when applying for one of those specifics, it is sometimes possible to extend the license to perform one of the other two functions, if certain requirements are met. Most producers tend to receive the ability to either distribute, retail or serve for on-consumption.
For all four types, you need a business location to apply from and the license is location specific. This is why when one restaurant closes, a new one will likely open in its same venue so as to acquire the license.
If you have a large business and an on-going reputation, your chances of acquiring a license timeously will improve. The time frame to wait for a license depends on a few other factors, but generally you are looking at a waiting period of six months to two years.
Once you acquire a liquor license, you have two more big factors to consider:
- Alcohol sells like hot cakes. People drink in good times and in bad.
- However, you are not the first person to discover this and competition in the liquor trade is fierce.
So don’t copy anyone else. Choose a niche and hit it hard to try and own it and avoid competition.
Don’t be afraid to try new things either — we started bringing out mixed cases of different craft beers and began a Beer of the Month club. No one else was doing that at the time and it really helped the business gain momentum.
Good luck. The worst case scenario is that you will have access to lots more alcohol.
Image: i be GINZ via Flickr.
