Durban Turf Club
DURBAN TURF CLUB
SUBMISSION TO THE PORTFOLIO COMMITTEE ON THE PROPOSED LEGISLATION TO RESTRICT TOBACCO PRODUCT MARKETING AND ADVERTISING
We place on record our sincere appreciation to the Portfolio Committee for allowing the Durban Turf Club to make representations with specific reference to the Rothmans July, a sponsored horseracing event held on the Greenville Racecourse during July of each year.
As Members will note, the Club's written submission is not voluminous but is presented in the form of a precis document for easy reference review.
In essence this presentation will focus on three main issues namely:
* Event Sponsorship
* Economic Impact and Job Creation
* Tourism in Durban
Horseracing is a leisure activity which specifically provides entertainment for adults over the age of 8 years. This latter restriction is particularly relevant as the Provincial Gaming and Betting Ordinances regulate participation through this age restriction.
The proposed bill to restrict tobacco product advertising and marketing is aimed at protecting the youth of our country and is therefore not applicable to the sponsorship of the horseracing industry as children do not, and are not influenced as the Bill proposes. We further submit that there exists a distinct difference between event and product advertising.
* The Rothmans July is a "horseracing event" which bears no direct relationship to tobacco or cigarette advertising. Throughout the promotional period for the Rothmans July all references refer to the event itself. There exists no advertising or marketing branding material relating to cigarettes. This ensures that, at all times, the public is focussed on the horse which is the essence of the promotion.
* Product advertising and promotion on the other hand, is product focussed and relates directly to the brand.
The Rothmans July is the longest standing sponsorship of a horseracing event in the World and has spanned from 1963 to the present day with contractual arrangements in place well beyond the year 2 000. This event is the most prestigious horseracing event in the country and market surveys show that more than 85% of adults questioned know of the Rothmans July, what the event is about and that it is held annually at Greyville.
This is an important factor as the race has been branded at significant cost to both the sponsor and the host venue over the years which has ensured its phenomenal success in attracting the best horses in the country to compete for the laurels of winning. The Rothmans July is an equine extravaganza unsurpassed in excellence and quality and is known in racing circles around the world.
The success of any event lies to a great degree in the professionalism of the sponsor and its team. Without this support the Rothmans July event will more than likely fail and horseracing will be the loser should Rothmans future participation be curbed.
As eluded to before, great cost has been invested in branding the Rothmans July to the degree that the brand name belongs jointly with Rothmans of Pall Mall and the Durban Turf Club. It is impossible to quantify the establishing cost of maintaining the branding as it would be extensive.
In the present economic climate, also noting the divergent culture and philosophies of business entities for and against horseracing, it will be an extremely difficult task to secure an alternate sponsor for the Rothmans July event, notwithstanding its prominence as the horseracing event in South Africa. Dedication and loyalty to the event is critical to its success. In the unlikely event that a sponsor of the calibre of Rothmans were found, it is likely that the new sponsor would merely divert funds from some other sponsorship and thus that prior recipient will be financially affected to its detriment.
Economic Impact and Job Creation
The Rothmans July horseracing event results in significant revenues being generated by not only the horseracing industry, but a broad spectrum of services which support the event and those that benefit from the event. Examples of these are noted as follows:
* horseracing: Totalisator and bookmaking turnover on Rothmans July day amount to about R150 million nationally compared with a normal race meeting of R30 million. Taxation derived by Central Government and Provincial Government through taxes amount to approximately R22m nationally for both betting tax and value added tax for the Rothmans July alone.
* Support suppliers of services to the event contribute significantly through added value for which the public are entertained at a price.
City of Durban: Attendance at the Rothmans July race day approximates about 36 000 patrons of which a significant number are tourists to the city. If one extrapolates the spending power of these tourists through to funds expended on airfares, accommodation, food, out of pocket expenditures etc., it can be seen that this horseracing event is central to the tourist industry of Durban during July of each year. Millions are spent on services to support visitors for the event and thus the city.
The prime reason for eluding to the aforementioned factors is to highlight the economic activity that is created around this horseracing event sponsored by Rothmans. Economic activity is the creator of jobs within the national environment and the Rothmans July provides such opportunity. As a specific point of reference, the Durban Turf Club increases its employment level threefold to support the additional demand for the event. Similarly, all other support organisations are equally required to ensure that quality of service and supply are supported by appropriate levels of employment. The Rothmans July event is the facilitator for employment opportunities nationally.
Having regard to the draft proposals on the table with reference to the Bill, we would urge the Portfolio Committee to support event and sport sponsorship as this forms part of a nation building exercise as, particularly through sport, our youth are prepared for the challenges that lie ahead.
In the event that the legislation is successfully promulgated, we urge the drafters of the Bill to allow a realistic period of time that would allow a phasing out of the sponsorship having particular regard to current binding contracts of sponsorship and the securing of an alternate sponsor.
D J FURNESS