Coca Cola in South Africa PDF

The Economic Impact of The Coca-Cola System
on South Africa
ICA
FR
HA
UT
SO
Prepared by
Division of Research
March 2005

on South Africa
Executive Summary
This executive summary presents the major findings of an in-depth study of the
Coca-Cola systems economic impact on South Africa. Conducted during 2003-04, the
study represents a wide-ranging assessment of economic linkages, enterprise
development, and employment.
In the decade following the introduction of multiparty democracy, South Africa
has seen tremendous economic progress. Yet serious challenges remain.
The Coca-Cola system serves as an example of long-term commitment to the
country. It has invested significantly in almost every year since 1994 and spread its
business network into all segments of the South African market. The extent of the
Coca-Cola systems participation in South African markets is evident throughout the
country. The Coca-Cola Company and affiliated brands are prevalent in the shopping
centers of major cities, the informal retail outlets of townships, and the small shops
found in rural villages.
As one of the worlds most efficient business systems, the Coca-Cola system offers
potentially expanding economic opportunity as South Africas renewal moves forward in
the decade ahead. In particular, entrepreneurial development and employment creation
are key objectives of economic policy in South Africa.
This study emphasizes that enterprise expansion and job creation result from
thriving local business networks, or clusters. Accordingly, the Coca-Cola system in South
Africa is seen as the core of a competitive cluster. This core encompasses the country
office of The Coca-Cola Company and local bottlers and canners who make products
under the Coca-Cola trademark. Moreover, a larger network of businesses is tied to this
core system, including suppliers, distributors, wholesalers, and retailers spanning every
region of South Africa. The Coca-Cola system employment network thus extends from
plant managers to street hawkers.
The study explores the nature of the Coca-Cola system beverage cluster, providing
employment estimates and other economic impacts generated by its activities. In
addition, the research team surveyed 760 informal retail outlets that sell Coca-Cola
products throughout South Africa. This survey was designed to probe a business system
that unites South Africas formal and informal sectors. The small retail operations
covered in the survey are considered important to South Africas future since they form
the commercial hub of their local economies and, indeed, the local communities. While
the South African informal retail sector has developed largely without demanding scarce
government resources, informal retail is often considered to be unstable or survivalist.
The survey results suggest, however, that participation in an advanced cluster may help
these retailers to become stable businesses.
Principal Findings
The study presents a wealth of information on the economic linkages between the
Coca-Cola system and the South African economy. In particular, the study shows the
extent to which the Coca-Cola system provides employment and income for South
African citizens as well as tax revenue for local and central governments. It can be seen
that The Coca-Cola Companys bottling activities engender substantial direct and
indirect effects, creating significant business and employment opportunities throughout
the economy. Overall, this impact is measured by an economic multiplier that captures
the ripple effects of the Coca-Cola system investment and ongoing operations.
The main findings of this study are the following:
The total economic impact of the Coca-Cola systems activities on gross domestic
product (GDP) is valued at 17.5 billion rand (all rand figures in the study are expressed
in 2003 prices). This represents about 1.4 percent of South Africas total GDP for the
year.
The Coca-Cola bottling system directly employed 9,740 workers in 2003.
Overall, it was estimated that 166,360 jobs were supported, directly and indirectly, by
the Coca-Cola system in South Africa. This calculation is based on the complex
interactions of the Coca-Cola system with the local economy through production and
distribution. The calculation relies on the most reliable and detailed impact model
available for South Africa.
The Coca-Cola systems employment impact represented about 1.4 percent of total
South African employment (formal and informal) in 2003.
Thus, the direct employment multiplier (the ratio of total to direct employment in
bottling) is approximately 17.1; that is, for every direct job created in the bottling
system, an additional 16.1 jobs were supported through upstream and downstream
linkages. Clearly, then, there is a considerable amount of employment activity
associated with the system as a whole.
In particular, the employment supported by the informal trade sectors activity

contributes significantly to the total impact. Informal trade accounts for 70,000 jobs in
South Africa. This is most likely a conservative estimate.
A diverse range of sectors benefit from the production and distribution of Coca-Cola
products, including plastic products, metal products, chemicals, iron & steel, motor
vehicles, electricity, business services, trade, food, and agriculture. In particular, the
sugar industry along with its important linkages to agriculture benefit from the large
local purchases documented in this study.
Total government income associated with the Coca-Cola systems impact is estimated to
be approximately 5 billion rand for 2003.
Economic Impact of The Coca-Cola System on South Africa, ii
Details for the summary points given above can be found in the full study.
Moreover, the effects of the Coca-Cola system on micro enterprise development are
presented in the study. The informal trading sector provides an alternative source of
income and employment when the formal sector cannot absorb all those individuals
seeking work. At the same time, many small retail operations stay in business and
remain profitable for years. They develop into a stable segment and prominent features
of many communities. Some expand from small home-based operations into larger
distribution centers and even into soft drink production.
The survey results presented in the study reveal that entrepreneurs who work
closely with the Coca-Cola system can attain high turnover and high margins with CocaCola products. The interaction of the Coca-Cola system with the informal sector can
provide help as entrepreneurial activities blossom into bona fide, sustainable businesses.
Methods and Terms

The primary research presented in this study entails an economy-wide analysis
designed to measure the economic multiplier effect of the Coca-Cola systems capital
investment and ongoing operations. Based on information taken from a survey of the
Coca-Cola systems bottlers in South Africa, the researchers evaluated the cluster of
business activities that developed indirectly around the bottling system.
To introduce the informal retail sector into the framework, the research team
surveyed 800 informal retail outlets (obtaining more than 760 completed surveys). The
outlets were selected to reflect both South Africas mix of retail channels and its
geographical diversitythe cities, townships, and rural areas. Owners and managers of
informal retail trade outlets were asked to respond to a pre-tested, structured
questionnaire, administered by trained interviewers. The survey instrument included
requests for detailed business information, such as employment, turnover, and net
income, as well as demographic characteristics of the small business owners and their
employees. A high response rate ensures that this would be one of the most complete
informal sector surveys ever undertaken in South Africa, or indeed anywhere.
Primary data collection from the Coca-Cola systems bottlers, the informal
retailers, and other sources of information provided the inputs needed to model the
Coca-Cola systems total impact on South Africas employment, GDP, and other
economic variables. The research team used a Social Accounting Matrix (SAM) to
calculate the extent of the linkages between the Coca-Cola system in South Africa and
other local business. This model allowed for a detailed assessment of employment (and
other impacts) related to both the informal and formal sectors.
The scope of the study is to assess the economic impact of the Coca-Cola system
in South Africa, its suppliers, and its distribution network. Throughout the study, the
following points concerning terms and definitions should be kept in mind.
The Coca-Cola system specifically refers to The Coca-Cola Company and its bottling
partners in South Africa.
The Coca-Cola Company in South Africa is represented by Coca-Cola Southern and East
Africa (CCSEAD).
Economic Impact of The Coca-Cola System on South Africa, iii
The distribution network refers the transportation of finished product from the plants
(to the retailers, warehouses and distributors), distribution centers, and outlets/
retailers both formal and informal.
Conclusion
The Coca-Cola systemencompassing the bottlers, suppliers, and the many
vendors that sell Coca-Cola brandshas a wide-ranging impact on the South African
economy. This study goes beyond conventional economic and employment impact
analysis to consider both upstream and downstream (including informal) linkages. Over
166,000 jobs are associated, directly or indirectly, with producing and distributing CocaCola products. This employment network comprises about 1.4 percent of South African
total employment.
This employment network spreads advanced marketing know-how and
production expertise to many regions of the country. This is one of the most extensive
multi-local business systems in the country. Consequently, the studys findings on
employment and enterprise development should be of interest to policy analysts,
economists, the media, government, and business leaders in South Africa.
Economic Impact of The Coca-Cola System on South Africa, iv
Preface
This study explores the relationship between multinational enterprise and
entrepreneurial development in African economies. There are few effective studies of
international business committing to the future of South Africa.
Given its business presence throughout South Africas diverse communities, the
Coca-Cola system has a potentially significant influence on the economy. Research on
the impact of the Coca-Cola system in South Africa began in 2003. The final study was
completed in November 2004.
The study was funded through a grant to the University South Carolina, based on
a proposal submitted to The Coca-Cola Company. We thank numerous executives,
managers and staff of The Coca-Cola Company for their cooperation.
The results are wholly based on field research by independent academic
institutions and widely accepted economic modeling techniques. Three research/
academic institutions collaborated to produce the study, setting the research agenda,
defining the methodology, collecting the data, analyzing the results, and preparing the
final report.
The Division of Research at the Moore School of Business, the University of South
Carolina (USC) conceptualized the project, coordinated the research, and produced the
final report. The responsibility for the study, including the initial design and the final
narration given in the pages that follow this preface, falls on the Division of Research in
the Moore School of Business. The study is part of an ongoing effort led by faculty to
explore the interaction between international business and local entrepreneurs. The
Schools international business programs have consistently been ranked highly by U.S
News & World Report.
The impact analysis draws on the proficient economic modeling work performed
by Ernest (Dirk) van Seventer. In addition, we thank the Bureau of Market Research,
University of South Africa, especially Professors A.A. Ligthelm and J.H. Martins, for
superb survey work.
As for the contributors from University of South Carolina, the lead researchers
were Dr. Douglas Woodward and Dr. Robert Rolfe. It is also important to recognize Dr.
Sandra Teel, associate director of the Division of Research, who prepared the study in
excellent fashion for final publication. Jan Collins, senior editor for the Division of
Research, deserves credit for expert copy editing. Patrick Warren, research associate
with the Division, merits special thanks for playing an invaluable role in the research.
Also on the Division staff, Cissy George helped in the wide variety of important tasks
involved in preparing manuscript. Finally, it should be recognized that this study, and
the research that underlies it, represents the effort and cooperation of many more people
than recognized here.
Economic Impact of The Coca-Cola System on South Africa, v

on South Africa
Table of Contents
EXECUTIVE SUMMARY .......................................................................................... i

Main Findings ..................................................................................................................... ii
Methods
......................................................................................................................... iii
Conclusion ......................................................................................................................... iv
PREFACE
........................................................................................................................... v
TABLE OF CONTENTS .......................................................................................... vi

CHAPTER 1: INTRODUCTION: GOALS AND OBJECTIVES OF THE STUDY .................
CHAPTER 2: COCA-COLA SOUTH AFRICA: COMPETITIVENESS

AND CLUSTERING ................................................................................................................
Macroeconomic Conditions ......................................................................................... 4

Table 1. Macroeconomic Summary ................................................................................... 5
Table 2. Employment by Sector ........................................................................................ 6
The Coca-Cola Systems Upstream and Downstream Network .................... 6

The Upstream Network ...................................................................................................... 6
Figure 1. Coca-Cola Production and Distribution ............................................................. 7
The Downstream Network ................................................................................................. 7
The Beverage Cluster ....................................................................................................... 7

Meeting Demand ................................................................................................................ 9
Resource Development ..................................................................................................... 10
Competitive Dynamics ...................................................................................................... 11
Economic Impact of The Coca-Cola System on South Africa, vi
Related and Supporting Industries.................................................................................. 12

Supporting Institutions .................................................................................................... 13
Summary
......................................................................................................................... 14
CHAPTER 3: THE ECONOMIC IMPACT OF THE COCA-COLA SYSTEM ....................
16
Introduction ...................................................................................................................... 16
Impact Analysis Methodology ................................................................................... 16
Direct Economic Effects ............................................................................................... 17
Direct Bottler Impact ....................................................................................................... 17
Export and Division Office Direct Impact ....................................................................... 18
Table 1. Current and Capital Expenditures by Coca-Cola Bottlers in South
Africa (2003 current R 000) ............................................................................... 19
Table 2. Labour at and Employment Skill Distribution by Coca-Cola Bottlers
South Africa ......................................................................................................... 20
Direct Formal and Informal Trade Impacts .................................................................... 18
Direct Formal Trade Impact ......................................................................................20
Table 3. Current and Capital Expenditures by Coca-Cola Related
Activities in South Africa (2003 current R 000) ......................................... 21
Direct Informal Trade Impact ....................................................................................20
Total Direct Impacts ................................................................................................... 22
Overall Economic Impact ............................................................................................ 24

Table 4. Sizing the Annual Market for Coca-Cola Products Trade in the
Informal Sector (winter sales, 365 days per annum) ................................... 23
Table 5. Sizing the Informal Market for Coca-Cola Products ............................. 24
Table 6. Employment in Informal Sector Trading of Coca-Cola Products ........ 24
Table 7. Consolidated Expenditures Associated with the Coca-Cola
Systems Activities in South Africa (2003 R 000) ....................................... 25
Current Expenditure ........................................................................................................ 26
Table 8. Consolidated Impact of the Coca-Cola System
in South Africa (2003 current R 000) ................................................................ 27
Capital Expenditure .......................................................................................................... 28
Impacts from Exports ................................................................................................ 28
Coca-Cola Southern Africa Division Office ..................................................................... 28
Formal Trade Impacts ...................................................................................................... 29
Informal Trade Impacts ................................................................................................... 29
Economic Impact of The Coca-Cola System on South Africa, vii
Conclusions ........................................................................................................................30
References ......................................................................................................................... 31
Endnotes ......................................................................................................................... 31
CHAPTER 4: RESULTS OF THE SURVEY ...........................................................................
32
Introduction ...................................................................................................................... 32
Characteristics of Business Owners ....................................................................... 32
Job Prior to Starting the Business ................................................................................... 32
Table 1(A). Job Before Starting This Business by Type of Business ........................ 33
Table 1(B). Job Before Starting This Business by Urbanisation .............................. 33
Career Orientation ........................................................................................................... 33
Table 2(A). Acceptance of a Job in the Formal Sector If Offered Today
by Type of Business .............................................................................................. 34
Table 2(B). Acceptance of a Job in the Formal Sector If Offered Today
by Urbanisation .................................................................................................... 34
Household Size .................................................................................................................34
Table 3(A). Average Household Size by Type of Business ....................................... 34
Table 3(B). Average Household Size by Urbanisation .............................................. 34
Household Income, Other Sources than from the Business ........................................... 35
Table 4(A). Household Members (Including Owner/Manager) Earning
an Income Outside This Business by Type of Business ...................................... 35
Table 4(B). Household Members (Including Owner/Manager) Earning
an Income Outside This Business by Urbanisation ............................................ 35
Table 5(A). Distribution of Respondents by Income Group for Income Earned
From All Sources Outside This Business by Type of Business ........................... 36
Table 5(B). Distribution of Respondents by Income Group for Income Earned
From All Sources Outside This Business by Urbanisation ................................. 36
Reason for Starting Business ........................................................................................... 37
Level of Education ............................................................................................................ 37
Table 6(A). Reason for Starting Business by Type of Business ................................ 37
Table 6(B). Reason for Starting Business by Urbanisation ...................................... 37
Table 7(A). Level of Education by Type of Business ................................................. 38
Table 7(B). Level of Education by Urbanisation ....................................................... 38
Characteristics of Businesses .................................................................................... 38

Legal Status of Businesses................................................................................................ 38
Years in Operation ............................................................................................................ 38
Table 8(A). Legal Status of Business by Type of Business........................................ 39
Table 8(B). Legal Status of Business by Urbanisation.............................................. 93
Economic Impact of The Coca-Cola System on South Africa, viii
Table 9(A). Distribution of Business by Time in Operation and

Type of Business ................................................................................................... 39
Table 9(B). Distribution of Business by Time in Operation and Urbanisation .......40
Type of Products Sold .......................................................................................................40
Table 10(A). Categories of Products Sold by Type of Business ................................40
Table 10(B). Categories of Products Sold by Urbanisation ...................................... 41
Table 11. Ranking of Product Sales in Order of Contribution to the
Turnover of Spazas/Tuckshops ........................................................................... 41
Turnover of Shebeens .......................................................................................... 42
Turnover of Hawkers ........................................................................................... 42
Turnover of Other Businesses.............................................................................. 43
Business Hours .................................................................................................................43
Table 15. Distribution of Businesses by Weekday and Number of Hours Open ..... 44
Table 16. Highest Percentage for Trading Hours by Weekday and
Type of Business ................................................................................................... 44
Table 17. Highest Percentage for Trading Hours by Weekday and Urbanisation ... 45
Role of The Coca-Cola Company ............................................................................... 44

Affordability ...................................................................................................................... 44
Table 17(A). Coca-Cola Products Are Affordable by Type of Business .................... 45
Table 17(B). Coca-Cola Products Are Affordable by Urbanisation .......................... 46
Coca-Cola Products Attract Customers ........................................................................... 46
Table 18(A). Coca-Cola Products Attract People to Store by Type of Business ....... 46
Table 18(B). Coca-Cola Products Attract People to Store by Urbanisation ............. 47
Table 19(A). When Buyers Purchase Coca-Cola Products, They Also Buy
Other Goods by Type of Business ........................................................................ 47
Table 19(B). When Buyers Purchase Coca-Cola Products, They Also Buy
Other Goods by Urbanisation .............................................................................. 47
Frequency of Purchases .................................................................................................... 46
Table 20(A). Frequency of Purchase of Coca-Cola Products by
Type of Business ...................................................................................................48
Table 20(B). Frequency of Purchase of Coca-Cola Products by Urbanisation ........48
Frequency of Coca-Cola Truck Deliveries ........................................................................48
Table 21(A). Frequency of The Coca-Cola Companys Truck Deliveries by
Type of Business ................................................................................................... 49
Table 21(B). Frequency of The Coca-Cola Companys Truck Deliveries by
Urbanisation ......................................................................................................... 49
Frequency of Deliveries by Wholesalers .......................................................................... 49
Economic Impact of The Coca-Cola System on South Africa, ix
Table 22(A). Frequency of Deliveries by Wholesaler and Type of Business ............ 50

Table 22(B). Frequency of Deliveries by Wholesaler and Urbanisation .................. 50
Frequency of Fetching from Wholesaler ......................................................................... 50
Table 23(A). Frequency of Fetching From a Wholesaler by Type of Business ........ 51
Table 23(B). Frequency of Fetching From a Wholesaler by Urbanisation .............. 51
Frequency of Fetching from Retailer ............................................................................... 51
Table 24(A). Frequency of Fetching from a Retailer by Type of Business ............... 52
Table 24(B). Frequency of Fetching from a Retailer by Urbanisation ..................... 52
Restocking of Coca-Cola products ................................................................................... 52
Table 25(A). Wait for Next Delivery When Running Out of Stock by
Type of Business ................................................................................................... 53
Table 25(B). Wait for Next Delivery When Running Out of Stock by
Urbanisation ......................................................................................................... 53
Table 26(A). Fetch Stocks from the Wholesaler/Retailer When Running
Out of Stock by Type of Business ......................................................................... 53
Table 26(B). Fetch Stocks from the Wholesaler/Retailer When Running
Out of Stock by Urbanisation .............................................................................. 53
Table 27(A). Average Number of Cases Fetched When Run Out of Stock
Table 27(B). Average Number of Cases Fetched When Run Out of Stock
by Urbanisation .................................................................................................... 54
Table 28(A). Method of Transport for Fetching of Coca-Cola Products by
Type of Business ................................................................................................... 54
Table 28(B). Method of Transport for Fetching of Coca-Cola Products
by Urbanisation .................................................................................................... 54
Temporary Closure of Business Due to The Coca-Cola Company Stock Shortages ...... 55
Table 29(A). Temporary Closure of Business Because Coca-Cola Products
Were Not Available by Type of Business ............................................................. 55
Table 29(B). Temporary Closure of Business Because Coca-Cola Products
Were Not Available by Urbanisation ................................................................... 55
Consumption of Coca-Cola Products: Location of Consumption .................................. 55
Table 30(A). Location of Consumption of Coca-Cola Products by
Type of Business ................................................................................................... 56
Table 30(B). Location of Consumption of Coca-Cola Products by
Urbanisation ......................................................................................................... 56
Physical Characteristics of Business ...................................................................... 56

Location of Business ......................................................................................................... 56
Equipment Installed in Business ..................................................................................... 56
Table 31(A). Location of Business by Type of Business ............................................ 57
Table 31(B). Location of Business by Urbanisation .................................................. 57
Economic Impact of The Coca-Cola System on South Africa, x
Table 32(A). Percentage of Respondents With Equipment Installed by

Type of Equipment and Business ........................................................................ 58
Table 32(B). Percentage of Respondents With Equipment Installed by
Type of Equipment and Urbanisation ................................................................. 58
Table 33(A). Percentage of Equipment Owned by The Coca-Cola Company by
Type of Equipment and Business ........................................................................ 58
Table 33(B). Percentage of Equipment Owned by The Coca-Cola Company by
Type of Equipment and Urbanisation ................................................................ 58
Impact of Refrigerated Drinks on Turnover ................................................................... 59
Table 34(A). Having a Fridge Help Selling More Coca-Cola Products
Table 34(B). Having a Fridge Help Selling More Coca-Cola Products
by Urbanisation .................................................................................................... 59
Type of Business Accommodation of Business ............................................................... 59
Table 35(A). Type of Business Accommodation by Type of Business ......................60
Table 35(B). Type of Business Accommodation by Urbanisation ............................60
Direct Access to Electricity and Tap Water ..................................................................... 61
Table 36(A). Direct Access to Electricity by Type of Business ............................... 61
Table 36(B). Direct Access to Electricity by Urbanisation ....................................... 61
Employment ...................................................................................................................... 61
Total Employment ............................................................................................................ 61
Table 37(A). Direct Access to Tap Water by Type of Business ................................. 62
Table 37(B). Direct Access to Tap Water by Urbanisation ....................................... 62
Table 38. Employment of Spazas by Race, Gender and Full- and Part-time ........... 63
Table 39. Employment of Shebeens by Race, Gender and Full- and Part-time ...... 63
Table 40. Employment of Hawkers by Race, Gender and Full- and Part-time ....... 64
Table 41. Employment of Other Businesses by Race, Gender and
Full- and Part-time ............................................................................................... 64
Table 42. Employment in Metropolitan Areas by Race, Gender and
Full- and Part-time ............................................................................................... 65
Table 43. Employment in Urban Areas by Race, Gender and Full- and
Part-time ............................................................................................................... 65
Table 44. Employment in Rural Areas by Race, Gender and Full- and
Part-time ............................................................................................................... 66
Table 45. Employment by All Respondents Included in the Study by Gender
and Full- and Part-time ........................................................................................ 66
Features of Ownership and Management ............................................................ 67

Status of Owner ................................................................................................................ 67
Gender of Owner ............................................................................................................... 67
Economic Impact of The Coca-Cola System on South Africa, xi
Table 46(A). Full- or Part-time Engagement of Owner in the Business by

Type of Business ................................................................................................... 67
Table 46(B). Full- or Part-time Engagement of Owner in the Business by
Urbanisation ......................................................................................................... 67
Table 47(A). Gender of Owner by Type of Business .................................................68
Table 47(B). Gender of Owner by Urbanisation .......................................................68
Race of Owner ...................................................................................................................68
Nationality of Owner ........................................................................................................68
Table 48(A). Race of Owner by Type of Business ..................................................... 69
Table 48(B). Race of Owner by Urbanisation ........................................................... 69
Table 49(A). Nationality of Owner by Type of Business ........................................... 69
Table 49(B). Nationality of Owner by Urbanisation ................................................. 69
Work done by Owner ........................................................................................................ 69
Table 50(A). Type of Work Done by Owner by Type of Business ............................ 70
Table 50(B). Type of Work Done by Owner by Urbanisation .................................. 70
Table 51(A). Running of Business by Type of Business ............................................ 70
Management ..................................................................................................................... 70
Table 51(B). Running of Business by Urbanisation .................................................. 71
Table 52(A). Owners With Business Training by Type of Business ......................... 71
Table 52(B). Owners With Business Training by Urbanisation ............................... 71
Business Training ............................................................................................................. 71
Table 53(A). Owners Who Said They Need Business Training by
Type of Business ................................................................................................... 72
Table 53(B). Owners Who Said They Need Business Training by Urbanisation ..... 72
Financing of Business ................................................................................................... 72

Start-up Capital ............................................................................................................... 72
Table 54(A). Training Needs of Owners in Order of Importance by
Type of Business ......................................................................................................... 73
Table 54(B). Training Needs of Owners in Order of Importance by
Degree of Urbanisation .............................................................................................. 73
Time Required to Mobilise Sufficient Start-up Capital .................................................. 73
Sources of Finances .......................................................................................................... 74
Table 55. Start-up Capital by Type of Business And Urbanisation .......................... 74
Table 56(A). Time Required to Mobilise Start-up Capital by Type of Business ...... 74
Table 56(B). Time Required to Mobilise Start-up Capital by Urbanisation ............ 74
Table 57(A). Sources of Finance by Type of Business ............................................... 75
Table 57(B). Sources of Finance by Urbanisation ..................................................... 75
Government Incentives .................................................................................................... 76
Expansion and Growth Plans ..................................................................................... 76
Business Expansion in Terms of Turnover...................................................................... 76
Economic Impact of The Coca-Cola System on South Africa, xii
Table 58(A). Government Business Development Incentive by

Type of Business ................................................................................................... 76
Table 58(B). Government Business Development Incentive by
Urbanisation ......................................................................................................... 76
Table 59(A). Business Performance in Terms of Overall Turnover by
Type of Business ................................................................................................... 77
Table 59(B). Business Performance in Terms of Overall Turnover by
Urbanisation ......................................................................................................... 77
Funding of Expansion ...................................................................................................... 77
Table 60(A). Business Performance in Terms of Coca-Cola Products by
Type of Business ................................................................................................... 78
Table 60(B). Business Performance in Terms of Coca-Cola Products by
Urbanisation ......................................................................................................... 78
Table 61. Average Additional Amount for Expansion by Type of Business
and Urbanisation .................................................................................................. 78
Table 62(A). Source of Funding of Expansion by Type of Business ........................ 79
Table 62(B). Source of Funding of Expansion by Urbanisation .............................. 79
Plans or Intentions for Future Development .................................................................. 79
Table 63(A). Most Important Plan or Intention for the Development by
Type of Business .................................................................................................. 80
Table 63(B). Most Important Plan or Intention for the Development by
Urbanisation ........................................................................................................ 80
Financial Performance ................................................................................................. 81

Monthly Turnover ............................................................................................................ 81
Table 64. Average Monthly Turnover of Sales by Type of Business
Operating cost ................................................................................................................... 81
Table 65(A). Average Monthly Operating Cost by Type of Cost and Business ........ 82
Table 65(B). Average Monthly Operating Cost by Type of Cost and Urbanisation . 82
Coca-Cola Products ........................................................................................................ 83

Support by The Coca-Cola Company ............................................................................... 83
Table 66(A). Support by The Coca-Cola Company by Type of Business ................. 83
Table 66(B). Support by The Coca-Cola Company by Urbanisation ....................... 84
Average sales per day of Coca-Cola products .................................................................. 84
Mark-up on Coca-Cola products ......................................................................................84
Table 67(A). Average Number of Products Sold During Winter by
Type of Product and Business .............................................................................. 85
Table 67(B). Average Number of Products Sold During Winter by
Type of Product and Urbanisation ...................................................................... 85
Economic Impact of The Coca-Cola System on South Africa, xiii
Table 68(A). Average Number of Products Sold During Summer by Type of

Product and Business ...........................................................................................86
Table 68(B). Average Number of Products Sold During Summer by Type of
Product and Urbanisation ....................................................................................86
Table 69(A). Cost Price, Selling Price And Mark-up of Coca-Cola Products by
Type of Business ................................................................................................... 87
Table 69(B).
Cost Price, Selling Price And Mark-up of Coca-Cola Products
by Urbanisation .................................................................................................... 89
Marketing and Advertising ......................................................................................... 91

Table 70(A). Marketing/Advertising Methods of Promotion by Type of Business . 91
Table 70(B). Marketing/Advertising Methods of Promotion by Urbanisation ....... 91
Table 71(A). Assistance by The Coca-Cola Company in Marketing/Advertising by
Type of Business ................................................................................................... 92
Table 71(B). Assistance by The Coca-Cola Company in Marketing/Advertising
by Urbanisation .................................................................................................... 92
Business Problems ......................................................................................................... 92

Table 72(A). Problems Experienced by Type of Business......................................... 93
Table 72(B). Problems Experienced by Urbanisation............................................... 93
Crime
......................................................................................................................... 93
Table 73(A). Victim of Crime During the Past Twelve Months by

Type of Business ......................................................................................................... 94
Table 73(B). Victim of Crime During the Past Twelve Months by Urbanisation .......... 94
Environmental Issues ................................................................................................... 94

Customers ......................................................................................................................... 94
Number of Customers ...................................................................................................... 94
Table 74(A). Type of Crime Experienced by Type of Business ....................................... 95
Table 74(B). Type of Crime Experienced by Urbanisation ............................................. 95
Table 75(A). Usage of Coca-Cola Products After Consumption by
Type of Business ......................................................................................................... 95
Table 75(B). Usage of Coca-Cola Products After Consumption by Urbanisation ......... 95
Table 76(A). Recycling Depot or Centre in Vicinity by Type of Business ................ 95
Table 76(B). Recycling Depot or Centre in Vicinity by Urbanisation ...................... 95
Table 77(A). Distribution of Businesses by Number of Customers and
Type of Business ................................................................................................... 95
Table 77(B). Distribution of Businesses by Number of Customers
Economic Impact of The Coca-Cola System on South Africa, xiv
Table 78(A). Distribution of Businesses by Customer Spending and

Type of Business ................................................................................................... 97
Table 78(B). Distribution of Businesses by Number of Customers
Customer Spending .......................................................................................................... 97
Customer Profile ...............................................................................................................98
Table 79(A). Customer Profile by Type of Business .................................................. 98
Table 79(B). Customer Profile by Urbanisation ........................................................ 99
Table 80(A). Frequency of Settlement of Accounts by Type of Business ................ 99
Table 80(B). Frequency of Settlement of Accounts by Type of Urbanisation ....... 100
Table 81(A). National Lotterys Effect On Sales by Type of Business .......................... 100
Table 81(B). National Lotterys Effect On Sales by Urbanisation ................................ 100
National Lottery Influence on Business .............................................................. 100

Table 82(A). Sale of Lottery Tickets by Type of Business ............................................. 101
Table 82(B). Sale of Lottery Tickets by Urbanisation ................................................... 101
Influence of AIDS on Businesses ............................................................................ 101

Table 83(A). Reduction in Turnover As A Result of AIDS by Type of Business .......... 101
Table 83(B). Reduction in Turnover As A Result of AIDS by Urbanisation ................ 102
Appendix A: Disaggregation of a 2000 SAM for South Africa

Appendix B: Bottler Survey
Appendix C: Informal Sector Survey
Economic Impact of The Coca-Cola System on South Africa, xv

on South Africa
Chapter 1
Introduction: Goals and Objectives of the Study
No doubt the most significant economic challenge facing South Africa is to
alleviate poverty. Increasing incomes will necessitate meeting the empowerment goals
set by the countrys leaders. It will also require creating thousands of jobs annually and
channelling entrepreneurial dynamism into viable local businesses.
The expertise and knowledge embodied in investments by the worlds leading
companies will be crucial in moving the South African economy forward. To employ
South African labour productively, new capital needs to spring from many sources, both
internal and external. In turn, the African employment base will expand only to the
extent that private investors will make substantial, long-term commitments.
The Coca-Cola enterprise system represents Africas largest employer, with
products sold in all segments of the continents diverse markets. It is a major employer
in South Africa as well. For over a decade, The Coca-Cola Company has been dedicated
to a large-scale private investment expansion program in the country. Investments in
production and the distribution infrastructure have extended The Coca-Cola Companys
linkages deep into the countrys market structure.
Understanding The Coca-Cola Companys competitive character, its employment
network, and its business linkages may offer some clues to solving some of South Africas
current poverty, employment, and other economic problems. Potentially, the Coca-Cola
system brings competence and globally competitive standards of production, marketing,
and management to local economies. Yet how does this significant actor in the South
African economy spread benefits throughout the country? What are the real
contributions of the Coca-Cola system to the economic and business climate?
Building on previous work conducted by the research team in the late 1990s, this
study looks at the economic impact of the Coca-Cola system in South Africa in 2003-04.
As before, the research undertaken for this project is far-reaching. University and other
researchers from South Africa and the United States looked at many ramifications of The
Coca-Cola Company as an enterprise system and its effects on the economy. Specifically,
the researchers intent has been to assess how manufacturing soft drinks spreads
employment across different, seemingly unrelated industries. Trading activities are
given special attention, in large part because the economic implications of trade are
poorly understood. Thus, a central purpose of this research is to investigate how micro
enterprise in the trade sector fits within a larger framework of business linkages in South
Africa. Informal trading may serve as a safety net for the unemployed? Does it provide a
catalyst to legitimate enterprise when linked to an advanced business cluster? The study
was designed to answer these and many other questions.
While covering many issues, the study has the following central objectives:
To explain the cluster of business activities directly and indirectly tied to The
Coca-Cola Companys system of production and distribution.
To assess the economic multiplier effect of the Coca-Cola system, with a special
focus on employment impacts.
To explore the relationship between the Coca-Cola system and the informal
micro enterprise sector of South Africa.
Above all, an exhaustive effort was undertaken to calculate the economic

multiplier effect of the Coca-Cola system. The research team examined the entire value
chain of goods and services involved in the production and distribution of soft drink
products by the Coca-Cola system across the country. Primary data used for the analysis
(and reported in the study) are based on surveys sent to all affiliated bottling and
canning manufacturers.
Economic impacts of production and investment were analysed through the most
reliable economic model available, known as the South African social accounting matrix
(SAM). The South African SAM estimates the impacts on production activities from
agriculture to manufacturing industries and services, labour, household income
distribution, and government revenue.
Most economic impact analyses focus exclusively on upstream linkages captured
by a similar SAM (or input-output) model; that is, impact analysis typically means
tracing the supplier relations and other indirect effects stemming from production
activities. A unique aspect of this analysis is a novel extension of existing economic
methods to capture the specific nature of the downstream linkages, including informal
trade, in South Africa.
A few caveats should be given at the outset of the report. First, the methodology is
oriented toward examining the current structure of the Coca-Cola system, based on the
available data for its operations and capital expenditure. Yet, it should be stressed that
every model requires complete data and rests on many assumptions. The appropriate
assumptions are explained in subsequent chapters. No model can ever completely
account for all the complex economic effects of international business and local
economic activity. It should also be noted that the results represent a snapshot in time
as modeled during 2003. As the South African economy continues to develop and
restructure, the relationships underlying this analysis will change as well.
To obtain credible results, the most complete data and best modeling techniques
were employed. In addition to calculating multiplier effects through the South African
social accounting matrix, this study examined other important aspects of the Coca-Cola
systems complex connections with the local economy. Notably, we present the results of
a large survey, probing the special role the Coca-Cola system plays in the informal trade
sector of the South African economy. Economic and political opportunities denied the
population during apartheid gave birth to many informal retail businessesthe
ubiquitous spaza shops, shebeens, and tuck shops. Many survive today, and others have
Economic Impact of The Coca-Cola System on South Africa, 2
started.
To gain more insight into the informal sector and its interaction with the CocaCola system in South Africa, the research team obtained 760 detailed surveys. The micro
businesses canvassed were selected to reflect both the South Africas mix of retail
channels and geographical diversitythe countys cities, townships, and rural areas.
Owners and managers of informal retail trade outlets were asked to respond to a pretested, structured questionnaire, administered by trained interviewers. The survey
instrument included requests for precise business information, such as employment,
turnover, and net income, as well as demographic characteristics of the small business
owners and their employees. A high response rate ensured that this would be one of the
most complete informal sector surveys ever undertaken in South Africa, or indeed
anywhere. This primary data collection provided essential information on the extent of
the linkages between the multinational enterprise and local business. A primary
objective is to discern whether these micro enterprises offer sustainable livelihoods and
thus help to alleviate poverty and spread economic benefits.
In sum, this study examines the structure and impact of The Coca-Cola Company
as an important business systemthe hub of a beverage cluster. Accordingly, this cluster
may serve to exemplify South Africas potential for expanding job and business
opportunitys, even in otherwise impoverished settings. Expanding employment and
enhancing small-business development will be crucial as the South African economy
continues its transformation in the 21st century.
The rest of this study is divided into the following three chapters.
Chapter 2 explains the Coca-Cola enterprise system, or beverage cluster, in detail.
Chapter 3 presents the methods, findings of the multiplier, and social accounting matrix
analysis.
Chapter 4 presents the findings of the informal trade sector survey.

on South Africa
Chapter 2
Coca-Cola South Africa: Competitiveness and Clustering
This chapter sets the stage for the studys findings by providing background on
the current macro and microeconomic challenges shaping the business climate in South
Africa. At the macroeconomic level, the country must elevate growth, control inflation,
stabilize the currency, and instill investor confidence. If this were not enough, the most
significant challenge is to stimulate employment. However, in many respects, creating
and sustaining employment is a microeconomic issueit will require boosting the
countrys competitive advantages from the bottom-upraising firm competitiveness and
productivity. Indeed, according to the widely embraced theory of economic development
put forth by Harvard University Professor Michael Porter, a country like South Africa
should focus its strategy on firm competitiveness and build business linkages through
clustering.
These serious economic challenges and the position of the Coca-Cola system in
the competitive structure of the economy are key themes explored in this chapter. The
next section begins with a brief overview of the major macroeconomic issues confronting
South Africa. This is followed by a look at South African employment, both in the formal
and the informal sectors.
We then turn to understanding the Coca-Cola systems role in building a competitive cluster in the beverage industry of South Africa. The Coca-Cola system interacts
extensively with the formal and informal sectors of the economy, with particularly deep
linkages in the trade sector. The nature of these linkages is covered in the last section of
the chapter.
Macroeconomic Conditions
A principal goal for South Africa is to spur aggregate economic growth. In many
respects, South Africa has the necessary conditions for macroeconomic expansion. The
countrys resources, market size, and superior infrastructure make it a prime candidate
for domestic and international investment. It is well known that South Africas manufacturers, financial institutions, business services, and commercial enterprises comprise
sub-Saharan Africas most advanced and diversified economic base. Many financial
institutions, mining multinationals, and manufacturersincluding those in beverages

and its supplier industriesare competitive with businesses in developed economies.
South Africa has charted an ambitious course for the economy, embraced in the
governments Growth, Employment and Redistribution (GEAR) program. There have
been successes in stabilizing the macroeconomic environment. Government spending
has been generally conservative under President Mbeki, bringing the budget deficit to a
sustainable level. This may set the stage for a loosening of fiscal policy that would spur
economic growth. South Africa also has a good reputation for sound monetary policy,
setting inflation targets and a commitment to getting the fundamentals right. Risks to
meeting macroeconomic targets are always present, however. Potential macroeconomic
shocks include sharply rising oil prices and the threat of currency instability.
Nevertheless, as seen in Table 1, the overall macroeconomic trends since the
recession of the early 2000s have been largely favorable. South Africa has had notable
success in maintaining moderate growth in real (inflation-adjusted) gross domestic
product (GDP). Manufacturing has increased production every year since 2001, and
agriculture has shown improvement as well. Table 1 shows positive effects in controlling
inflation (the rate of change in consumer prices), along with moderation in interest
rates. As the economy has grown, the government fiscal balance has turned negative, but
as a percentage of GDP it has remained relatively low. Fueling economic growth, exports
have risen and outstripped imports.
Table 1. Macroeconomic Summary
(%, unless otherwise indicated)
Real GDP Growth
Manufacturing Production Growth
Gross Agricultural Production Growth
Consumer Price Inflation (average)
Short-term interbank rate
Government Balance (% of GDP)
Export of goods fob (US$ billion)
Import of good (US$ billion)
2001
2.8
2.8
-1.7
5.7
13.8
-1.0
30.7
25.9
2002
3.0
5.3
4.0
9.2
15.8
-0.8
31.1
26.7
2003
2.5
5.7
3.6
6.3
15.4
-2.6
32.3
28.7
2004
3.0
5.0
3.5
0.8
12.6
-2.4
33.6
29.3
Sources: World Bank, Economist Intelligence Unit (EIU) Estimates, South African Reserve
Bank (SARB).
a
There is a discrepancy between SARB and World Bank figures. EIU estimates are used for
some years.
Along with creating the macroeconomic conditions for stability, South Africa, like
all countries, must expand business opportunities and foster job creation across the
country. Sluggish formal sector employment growth and widespread informal employment pose particular burdens on South Africa. Stepped-up economic growth is obviously
needed to reduce the persistently high unemployment, reaching nearly one-third of the
workforce. At the same time, the growth sectors of the economy, including informal
sector businesses, must become more competitive if employment gains are to last.
Table 2 shows the breakdown of formal and informal sector employment. It can
be seen that the trade sector, where the Coca-Cola system has extensive interactions, is
an especially large part of the employment structure. The formal trade sector accounts
for more than 17 percent of employment. For informal trade, the trade sector dominates
with 36 percent of total employment.

Table 2. Employment by Sector (% of
The nature of these informal trade
Total)
businessesthe spazas, shebeens, and
Formal Informal Total
other points of salesalong with their
Agriculture
10.3
23.4
12.2
business relationship with The
Mining
6.3
0.2
4.5
Coca-Cola Company is documented in
Manufacturing
18.3
8.2
14.8
the survey results presented in
Electricity
1.0
0.0
0.7
Construction
4.2
10.2
5.2
Chapter 4.
17.3
36.0
19.7
Achieving macroeconomic stabil- Trade
Transport
5.7
4.6
5.0
ity can be an arduous, never-ending
Business Services
12.2
2.6
9.3
task for South Africas policy makers, as
Community Services
23.8
7.7
18.6
is true elsewhere. At the same time, the
Private Households
0.2
6.7
9.4
Unspecified
0.7
0.4
0.6
macroeconomic fundamentals (includTotal
100.0
100.0 100.0
ing low inflation, a stable currency, and
the government budget balance) repreSource: Statistics South Africa: Department of Trade and
sent only certain necessary, but not
Industry. Data for September 2002.
sufficient, conditions for South Africa to
achieve its economic goals. In addition, microeconomic (firm-level) conditions must be
present in the economy, creating a competitive climate that supports productive firms,
and, more importantly, deeply rooted clusters of businesses in the local economy.
The Coca-Cola Systems Upstream and Downstream Network

In this section, we explore the beverage cluster. To understand how the Coca-Cola
system can contribute to the competitiveness and growth of South Africa, it is necessary
to understand its linkages with the economy. Hence this section begins with an explanation of the business linkagesupstream and downstreambetween the Coca-Cola system and the South African economy. This serves as a prelude to a more detailed examination of the Coca-Cola system and the beverage cluster in South Africa.
Figure 1 shows the Coca-Cola bottling system (including support of the country
and regional headquarters) in the middle of the value stream, with a surrounding
network of upstream and downstream businesses. Overall, the Coca-Cola business
network spans agriculture to retail, from sugar production facilities to vendors with
street pushcarts. Almost all of the value-creating activitiesfrom manufacturing
through distributionare locally based.
The Upstream Network
The actual soft drink production process is capital intensive, with highly automated production lines. The upstream supplier network directly supplies inputs and
services to the bottling production system. Further upstream suppliers then feed the first
tier suppliers (increasing the economic multiplier effect explained in the next chapter).
Thus, to make the final product, the lines draw on numerous inputs supplied
upstream by companies, from agriculture to manufacturing to services. Some of the
main local inputs include: sugar, CO2, beverage ingredients, and packaging (paper, PET,
glass, closures, and crowns). Moreover, equipment input suppliers contribute to the
value chains, such manufacturers of bottling line machinery, trucks, and lifting
machinery.
Figure 1. Coca-Cola Production and Distribution
Wholesalers
Packaging Suppliers
Transport & Other

Equipment Suppliers
Advertising & Other

Business Services
Construction
U pstream N etwork
Production
Coca-Cola
Bottlers
Retailers
System
Final Consumers
Further
Upstream Linkages
Beverage Ingredient
Suppliers
Other
Points of Sale
Downstream N etwork
Local business services include financial institutions, advertising agencies, sign

makers, design firms, business consultants, accounting firms, law offices, repair services,
and hotel and travel companies. On the downstream side, transportation of the product
to bottlers also represents a significant economic activity. Finally, construction firms are
major partners during expansion programs.
The Downstream Network
On the upstream side, we have seen that most of the inputs shown Figure 1 represent South African production activities. Local inputs account for the vast majority of the
final product. That is certainly true of the downstream side (also shown in Figure 1). The
Coca-Cola system has extensive ties through its sophisticated local networkan infrastructure that reaches across all South African provinces. Arguably, it is the international
business system with the greatest commitment to the diverse population of South Africa.
Although Coca-Cola is the most recognized brand in the country, reaching consumers
requires a complex network of distribution channels. The downstream network is responsible for delivering the product of all bottlers to meet demand. The bottling system
distributes some Coca-Cola products directly through retailers.
South African retail outlets run the gamut from large stores to small-scale, privately-owned enterprises, convenience stores, restaurants and small individual pointsof-sale. The distribution network includes informal outletsspaza shops, tuck shops,
shebeens, and hawkers. In addition, wholesalers distribute products to local retailers
and other outlets. Besides bottling plants, the Coca-Cola system includes warehouses
and sales depots. Chapter 4 will present a comprehensive survey of the informal distribution network.
The Beverage Cluster

How can Coca-Colas extensive business system contribute to South Africas
competitiveness? To answer this question, it useful to place beverage activities in the
context of cluster theory. Modern cluster analysis has its origins in Harvard Business
School Professor Michael Porters work, first published in The Competitive Advantage
of Nations.1 In this book and subsequent articles, Porter introduced a model of competitive dynamics that now forms the basis for microeconomic strategy from Singapore to
Spain.
In contrast with traditional economic models, Porter argues that it is not what a
country produces, but how productively and efficiently. In theory, a country like South
Africa can develop competitive businesses in any sector by upgrading productivity.
Porters approach suggests that upgrading firm competitiveness can best take place
through clusters.
A cluster is a group of interconnected companies and associated institutions in a
particular economic field, linked by mutual interests and complementarities. Clustering
differs from the traditional industry approach to understanding economic development.
With a cluster, there is synergy across industries, tying core firms, suppliers of specialized inputs, components, machinery, services, financial institutions, and service companies. A beverage cluster would certainly include the upstream and downstream activities
already discussed but also producers of complementary products; specialized infrastructure providers; government and other institutions providing training, education, information, research, and technical support; along with standards-setting agencies.
To identify a cluster, Porter recommends first starting with a key firm or group of
firms. No doubt The Coca-Cola Company acts as a key firm in the South African beverage
cluster. As a major producer of non-alcoholic beverages in South Africa, Coca-Colas
name is synonymous with soft drinks. The core presence of The Coca-Cola Company in
the South African economy is Coca-Cola Southern and East Africa Division (CCSEAD), a
wholly owned subsidiary. Based in Johannesburg, CCSEAD acts as a liaison between
bottlers throughout southern Africa, East Africa, and the African Islands and the U.S.
multinational company, providing technical, marketing, and managerial support, while
promoting quality assurance, distribution efficiency, and human resources development.
It strives to ensure that local bottlers realize continuous growth and profitability, which
spurs higher concentrate sales that benefit the multinational company.
In addition, The Coca-Cola Company has a significant interest in two canning/
bottling companies in South Africa. It owns a share in Coca-Cola Fortune (approximately
21 percent sales volume contribution), and a share in Coca-Cola Canners of Southern
Africa (CCCSA), operator of the largest canning facility in the Southern Hemisphere.
Along with CCSEAD, the core businesses in the South African cluster are franchise
bottlers. In addition to Coca-Cola Fortune, licensed/franchise bottlers are Amalgamated
Beverage Industries (ABI) (approximately 60 percent of sales volume), Cook (approximately six percent of sales volume), and Peninsula BeveragesForbes (approximately 13
percent of sales volume). Coca-Cola Canners of Southern Africa produces canned products mainly and these are distributed via the bottlers network.
As stipulated in the Bottlers agreement, for bottlers to participate in the cluster,
the critical competency is a mastery of the actual bottling process, for no bottler without
a advanced level of technical expertise could become a Coca-Cola licensee. In turn, the
South African bottlers join (or are part of) a network of the most experienced bottlers in
the world. This network has established best practices for production quality and efficiency, practices which new affiliates are then able to adopt, adapted to their needs.
Essentially, CCSEAD serves as a nexus in the alliance with the South African bottlers,
responsible for activities like joint marketing, public relations, and information flow. The
productive success of the beverage cluster, like others examined by Porter, is driven by
five factors.
demand conditions
resources, or factor development
firm strategy, structure and rivalry
supplier relations
supporting institutions
These are the competitive drivers of any business cluster, helping to create and
expand firm-level, cluster-level, and even country-level competitive advantage. The
following elucidates these five aspects of the beverage cluster in the South African context.
MEETING DEMAND
The viability of any private enterprise system like the Coca-Cola system is determined by demand conditions; that is, by meeting consumer preferences. Strong domestic demand can be fundamental in the development process. Consumers interact with
production through marketswith retailers and other points of sale. Customers with
sophisticated demand drive product differentiation and competition on non-price
grounds. Local demand can also reveal market segments ripe for differentiation. Marketing campaigns can cultivate sophisticated demand conditions, as can higher levels education and industrialization.
Discerning and sophisticated consumers help promote the beverage cluster and
push it to improve both its products and its efficiency. To meet that demand, an enterprise system like the Coca-Cola system must obviously understand the peculiarities of
local demand conditions in South Africa, from its rural to its urban regions.
To meet consumer demand, the licensed bottlers must build effective, highly
localized marketing and distribution systems. CCSEAD works closely with its affiliated
bottlers on regional marketing strategy. International marketing experts work with
experienced local firms to promote awareness, launching marketing and advertising
programs designed to preserve Coca-Colas brand recognition, increasing sales and
profits for both the bottlers and CCSEAD. But the only facet of business that rivals The
Coca-Cola Companys success in branding is its reputation for effective and flexible
distribution networks. This experience too is shared with affiliated bottlers. In South
Africa, the majority of production goes directly to retailers, but about 20 percent first
passes through the hands of wholesalers and/or sub-wholesalers. Licensed bottlers have
close relationships with their major retailers and wholesalers, and CCSEAD provides
proven methods to keep these relationships strong and mutually beneficial. These downstream linkages will be more carefully examined as that aspect of the cluster is considered in its own right.
In short, success in meeting demand depends on the distribution and retail part
of the businesses. Twenty-eight percent of Coca-Cola products are distributed through
wholesalers, mostly to smaller retailers and retailers in rural areas. There are over 1,500
primary wholesalers and hundreds of sub-distributors and runners. The primary wholesalers have a strong and direct connection to one of the licensed Coca-Cola bottlers, and
act as an intermediary, using their greater knowledge of their local area to ensure the
broadest distribution of Coca-Cola products to interested retailers.
The sub-wholesalers, on the other hand, usually do not have a direct link to a
bottler. They work with wholesalers and are integral to distribution among small, informal retailers who bring much of the product to the townships and countryside. Often,
they also engage in retailing themselves. A larger bar in a village may make a trip into
town and overbuy from a formal wholesaler, selling off the extra product to small spaza
shops in the village.
When there is no such sub-wholesaler to provide for these very small retail outlets, they are often provisioned by runners. Runners truck product to small retailers,
mostly to those who cannot hold large inventories to meet any unusual demand or need
frequent re-supply. Runners are especially common in South Africas townships, where
they are a crucial link in the downstream network.
This final link in the downstream network is retailers. To subsume all Coca-Cola
retailers under one category is deceptive. Formal retailers encompass a gamut of businesses: hyper markets, supermarkets, gas stations, restaurants, cafes, and bars. Informal
retailers are equally diverse: spaza shops, shebeens, kiosks, hawkers, tuck shops, and
small informal restaurants. While some retailers purchase their product from wholesalers, about eighty percent is purchased directly from a bottler.
The relationship between retailers and wholesalers/bottlers is often very close.
For many smaller retailers, Coca-Cola products represent a large part of their turnover
(see Chapter 4). In most cases, retailers make use of advertising materials provided by
the core of the Coca-Cola system, and based on favorable need assessment by the bottler;
traders are provided with branded coolers as a means to improve sales velocity. Such
coolers are the property of The Coca-Cola Company. These can be used only for
Coca-Cola products. The Coca-Cola system also requires a certain level of record keeping
in line with any sound business practice, which some retailers find burdensome, but this
situation is similar to the strict requirements for suppliers (discussed later). The initial
investment in setting up these records can lead to greater efficiency in other aspects of
the business, beyond the relationship with the Coca-Cola system.
In many areas, informal traders provide the necessary access to the diverse demand for beverages across market segments. Thus, even an advanced business must
have close connections with small-scale enterprise to reach the ultimate consumer. It is
hard to overemphasize how important formal and informal retail outlets (as probed later
in this study) are critical to building a cluster. Potentially, entrepreneurs who work
closely with the Coca-Cola system can attain high turnover and margins with Coca-Cola
products. The Coca-Cola Company helps entrepreneurial activities blossom into bona
fide, sustainable businesses.
It should be recognized that the demand conditions in the beverage cluster are
not limited to the downstream consumer of the products. the Coca-Cola systems production places demand on suppliers, and stringent requirements for suppliers are a great
example of sophisticated demand in Porters sense. This cluster driver will be explained
later in a discussion of related and supporting industries.
RESOURCE DEVELOPMENT
Next, Porter maintains that clusters must have the resources to succeed in meeting demand. Resources, or factors, include tangible assets such as infrastructure (roads,
electricity) and less-concrete factors such as the legal system, information, and educational resources/research institutes.
Most important for competitive clusters, however, are two basic factors: labour
and capital. Coca-Cola bottlers must be able to marshal human and capital resources to
elevate productivity. The critical, often scarce resource in cluster development is managerial talent. In the core, CCSEAD offers training sessions to update workers and, more
importantly, managers abilities to work efficiently and productively. CCSEAD also offers
technical training.
Capital is needed to continually upgrade beverage cluster development. To secure
and develop a license, a local Coca-Cola bottler must have sufficient capital to invest in
the requisite land, building structures, machinery, equipment, trucks, bottles, and
crates. The actual production process is capital intensive and highly automated. Moreover, as discussed earlier, bottlers must market their beverage to wholesalers and retailers, as well as to consumers, and therefore invest in an efficient distribution system to
get it within an arms reach of desire.
As far as capital requirements are concerned, Cola-Colas role varies from bottler
to bottler. In some cases, The Coca-Cola Company will take an active role in financing
(equity) and control (management), whilst in other cases it only offers contacts and
suggestions to owners. The goodwill and prestige associated with the Coca- Cola name
should not be overlooked. Being connected with one of the top consumer brands in the
world can open up opportunities for financiers, who are comforted by the knowledge
that licensed bottlers will have the full support of The Coca-Cola Company and a proven
business model.
COMPETITIVE DYNAMICS
In any cluster, the particular nature of firm strategy, market structure, and rivalry
can spur or deter productivity, efficiency, innovativeness, and new business formation.
Every successful cluster depends on key, innovative firms, like The Coca-Cola Company
and local bottlers, to drive a strategy of enhancing local value-creating activities.
In the Porter development model, both advanced and developing economies
benefit from highly efficient firms. In upgrading competitiveness at the microeconomic
level, producers shift from simple imitation to focus on total competitive advantages,
requiring constant technology and efficiency upgrades in production and distribution.
Cluster competition begins to play itself out in terms of differentiation, not simple price
competition. This level of firm competition requires that the cluster innovate and commit to high levels of investment.
Also important to cluster competitiveness is the quality and strength of firms in
the upstream and downstream network. For example, an important supplier industry in
beverages is sugar. In this case, CCSEAD, through the South African Sugar Association,
works directly with sugar suppliers to upgrade the quality standards of sugar to meet the
world standards that are a requirement for the Coca-Cola companys beverages, increasing quality outside the core firms.
The Coca-Cola network improves the competitiveness of the whole cluster
through relations in the upstream and downstream network. Upstream, the Coca-Cola
systems specifications are particularly demanding, but South African businesses have
proven to have the capability for advanced, competitive manufacturing and service
operations. Many supplies are delivered on a just-in-time basis. CCSEAD selects suppliEconomic Impact of The Coca-Cola System on South Africa, 11
ers according to their ability to deliver quality products on demand. The application of
World standards for quality in the local market improves the global competitiveness of
suppliers in the value chain.
In rounding out this discussion on competitive cluster development in beverages,
it should also be recognized that CCSEAD has interactions with other core companies.
Notably, SAB-Miller has a unique relationship with the Coca-Cola system. SAB-Miller is
a major player in the beverage production business, while at the same time it owns the
largest Coca-Cola bottler in South Africa, ABI. Currently, SAB-Miller is the second largest brewery in the world, by volume, and ABI is one of the largest bottlers of Coca-Cola
products outside the United States.
The advantages to productivity that come with this relationship are myriad. Both
companies have decades of experience in the beverage industry. Each ranks among the
top five in most recognized and esteemed brands in South Africa, a credit to their ability
to work together to mutual success. Working through CCSEAD, intentionally or not,
SAB-Miller indirectly improves the efficiency and productivity of Coca-Cola bottlers by
sharing information on best practices. But in the end, the global improvements help all
bottlers, including SAB-Miller, by increasing brand awareness and customer goodwill. In
a network like this, success breeds success.
In this relationship of leading beverage firms, one finds the mixture of competition and coordination that is the key feature of a mature cluster. With two firms on the
forefront of the world wide beverage industry, South Africa can glean global benefits for
its local economy. The relationship is an example of complex business systems driving
innovation in any cluster. As they compete for consumers, these two major producers
must continually work together to improve quality and efficiency where they have mutual interests.
RELATED AND SUPPORTING INDUSTRIES
As indicated already in this study, a viable cluster also depends on a strong supplier network. To make the final product, the beverage lines combine concentrate with
other inputs: water, sugar, carbon dioxide, bottling, and packaging materials. Every unit
off the line must meet strict quality standards, as required by the Coca-Cola license
agreement, yet costs must be low enough for production to be profitable. For this to be
possible, bottlers must possess a number of important competencies, each with a related
linkage to CCSEAD. Bottlers must be able to identify reliable suppliers of inputs and
master a complex and exacting production process.
A full complement of local suppliers helps anchor a cluster in the local economy
and engender strong multiplier effects. For many of the suppliers, the Coca-Cola system
is a major purchaser. Strong relations are built; they form a cluster rooted in the local
economy. Close supplier relations in the systemeconomies of scale, joint production
planning, and inventory controlgenerate cost savings for the suppliers and the bottlers.
A key competency is supply chain management: the ability to locate quality suppliers that fit well in the production process. Every bottler has its own procurement
pattern, but the inputs are standard. Bottlers prefer local suppliers: packaging suppliers
to provide plastic, glass, paper, closures, and crowns; equipment suppliers for bottling
line machinery, trucks, and lifts; business services such as financing, advertising, designing, and accounting; and, most importantly, local sugar refiners capable of producing
high quality sugar. But the demanding production process requires competitive manuEconomic Impact of The Coca-Cola System on South Africa, 12
facturing and service business. Coca-Cola bottlers select suppliers according to their
ability to deliver products on demand to the right quality specification, with many suppliers delivering on a just-in time basis. CCSEAD works with bottlers and potential
suppliers to ensure the creation and stability of such a network. More will be said of
CCSEADs connection to input suppliers when we move more explicitly up the supply
channel.
It is difficult to overestimate the importance of high quality and dependable
sources of supplies to the success of the Coca-Cola system in South Africa. A reliable
source of high quality sugar is of special importance. For example, since the Coca-Cola
system accounts for 20 percent of the South African sugar market, the relationship is
central for the sugar industry as well.2 This leads to benefits of scale, joint production
planning, and inventory control. As recently as last year, however, the relationship has
produced friction as the Coca-Cola system pushed back on sugar price increases. This is
an example of the complex mix of coordination and competitiveness that one often finds
in a cluster.
Another example of the importance of supply linkages is packaging. This includes
glass, PET bottles, cans, paper, closures, and crowns, as well as crates and boxes for
shipping. South Africas level of development ensures that advanced, competitive manufacturing businesses are able to supply these products on demand and to the high standards the Coca-Cola system requires. Since the Coca-Cola system is often a major purchaser for these firms, strong supplier relations are the norm. This relationship runs
both ways, as the Coca-Cola system will often catalyze supplier upgrading by providing
technical know-how and experience. But perhaps the strongest impact the core
Coca-Cola system has on its upstream suppliers is its high expectations. The modernization in production and delivery required of Coca-Cola suppliers has also allowed these
firms to compete more broadly in their individual markets. Services such as just-in-time
provision and cutting-edge quality control spillover into other aspects of the suppliers
businesses, making them more efficient and profitable in their own right. These considerations apply to other supplier firms which have a continuing relationship with the
Coca-Cola system, such as equipment suppliers, business services, repair services, and
hotel and travel companies.
In terms of social impact of the cluster, the Coca-Cola system has programs to
remove all solid waste generated by its operations (cans, PET, glass, and so forth). This
process creates jobs and improves the economic status of ordinary South Africans who
would otherwise not have a source of income.
SUPPORTING INSTITUTIONS
The final driver in the beverage cluster is the local presence of supporting institutions. This includes industry organizations which provide a venue for sharing best practices, educational facilities which provide trained personnel, financial institutions which
provide ready capital, and governmental institutions which provide regulatory supervision and support.
A great example of an industry organization which plays a key role in the beverage
cluster is the South African Sugar Association (SASA). This association, which had been
in existence since 1935, brings together both millers and growers to discuss common
problems and solutions. SASA funds research into increasing sugar yields and quality,
bringing these results to the field through extension programs offering training and
education. It also offers development financing to small-scale sugar cane growers who
could not obtain credit through normal banking channels or through the Umthombo
Agricultural Finance Initiative. Finally, the presence of the SASA allows the sugar industry, a collection of growers and millers of various sizes, to enter a nexus of
complementarity and competition with the Coca-Cola system very similar to that between SAB-Miller and The Coca-Cola Company. In some ways, they are strongly dependant and must work very closely together, but they also have their own individual interests which are sometimes in conflict, as evidenced by a recent row over the price of
sugar. This give and take pushes progress in the cluster, increasing productivity and
competitiveness.
More generally, many sector participants belong to the South African Association
of Food Science and Technology. This organization is a national association, which is
concerned with advancing the knowledge of Food Science and Technology. This it does
through encouraging scientific research, organizing meetings, seminars, workshops and
congresses, publishing papers and assisting in educational activities. The National Secretary maintains a membership office equipped with telephone, fax, photocopier, and
computer. Currently the Association has about 1400 members throughout Southern
Africathe Cape, KwaZulu-Natal and Northern branches attend to the regional affairs of
the Association.
The educational system in South Africa is also a major boon to the competitiveness of the beverage cluster. By far the most advanced higher education system in Africa,
the South African university system consists of 21 universities serving some 400,000
students. But perhaps more important is South Africas unique system of technikons.
South Africas 15 technikons represent a dynamic and highly innovative sector of higher
education in South Africa. Today, the technikons are far more than technical colleges
many aspire to the title of universities of technology and since 1995 have offered degree programs up to the doctoral level. Technikons are distinguished from the universities not by the quality of their educational product, but rather by their focus. According
to the Committee of Technikon Principals (CTP), technikons aim to
. . . provide and promote, in conjunction with the private and public sectors,
quality career and technology education and research for the development needs
of a transforming South Africa and a changing world.
Many technikons are involved in collaborative industry-directed research programs, and

this involvement in turn is reflected in curriculum design. The ability of graduates to hit
the ground running and immediately begin to be economically productive is a key
objective. These graduates form a base of highly trained technicians, business managers,
engineers, and production supervisors, all of whom are required by the modern production techniques in a dynamic sector such as beverages.
A final important institution included in the beverage cluster is the sector representative of the South African Department of Trade and Industry. The role of this institution is best seen by examining one of its key programs, the Regulatory Environment
Program. This program works to create a regulatory environment that will boost business and consumer confidence while actively promoting economic development and
growth. It also focuses on disseminating knowledge of existing legislation administered
by the economic cluster.
Summary
In many respects, South Africa has the conditions for a stable, growing, aggregate
economy. Admittedly, growth will have to accelerate to create sufficient employment for
South Africans, especially in the formal sector. At the same time, the conditions for
enhancing firm and cluster competitiveness must be present.
The beverage cluster shows how the country can develop at the microeconomic
level. Competitiveness is driven by firms that respond to shifting, differentiated demand,
commit capital resources, find talented workers, and upgrade productivity.
In the next chapter, we explore the quantitative dimensions of the Coca-Cola
cluster. It should be emphasized that no economic model can account fully for all the
interrelationships that make up a complex business system. Nevertheless, an impact
model can help measure how deeply the Coca-Cola system is embedded in the South
African economy. We will follow the best-practice techniques available to calculate the
extent of the Coca-Cola systems local linkages. The main metric that emerges from this
modeling exercise is the economic (and employment) multiplier. The multiplier effect
for employment, economic output, and related measures provide the parameters for the
Coca-Cola systems participation in the South African beverage cluster, as described in
the chapter.
Endnotes
1 See Michael Porter, The Competitive Advantage of Nations, New York: The Free Press, 1990;
and Clusters and the New Competitive Agenda for Companies and Governments in On
Competition, Boston: Harvard Business School Press, 1998.
2 Cokes Sugar Ultimatum by Herb Payne, MoneywebKZN 11/08/2002.

on South Africa
Chapter 3
The Economic Impact: Methods and Results
Introduction
This chapter presents the economic impact of the Coca-Cola system on South
Africa. It relies on operational and capital expenditure data for Coca-Cola bottlers,
export activity, Coca-Cola division office operations, and downstream formal and
informal traders. The total impact is then determined by a large complex model of the
South African economy.
Strong employment impacts spring from soft drink production and distribution
channels. It will be shown (in the final section of this chapter) that the Coca-Cola system
supported, directly and indirectly, approximately 166,000 jobs in 2003. Moreover, the
results reported in this chapter reveal that informal trade generates some of the largest
employment impacts. In South Africa, hundreds of thousands of informal trading
enterprises sell soft drinks. Based on the number of establishments, volumes, and trade
margins, it is estimated that the Coca-Cola system sales underlie the employment base of
more than 70,000 South Africans as a result of informal trade. These enterprises and
individuals support community development in every region of the country.
The impact results are presented in this chapter as follows. First, there is a brief
discussion of the methods used in the impact analysis. The direct impact is then given
for operational and capital expenditures by the bottlers, South African exports to
bottlers elsewhere in Africa, the expenditures by Coca-Cola division office, and spending
of the formal and informal traders. The latter information is drawn from a purposedesigned survey in selected informal areas of South Africa. The procedure used to
estimate informal trade impacts is discussed in detail. The chapter then presents the
consolidated or total impact. The results for all direct and indirect effects of the CocaCola system are given in a table 8 at the end of the chapter.
Impact Analysis Methodology

This section describes the methods used to evaluate the impact of the Coca-Cola
systems operations on the South African economy. The analysis begins by collecting
information from bottlers and using the direct input data to model the total economic
impact. Essentially, the direct inputs into the model are operational and capital
expenditure data for the various the Coca-Cola system expenditure components
(supplied by The Coca-Cola Company and its bottling affiliates in South Africa). A survey
of informal trade outlets added additional information needed to model the downstream
linkages.
This survey information provides the input needed to calibrate the economic
impact. The actual impact calculations are based on the best available economic model
for South Africa, commonly referred to as the South Africa SAM (Social Accounting
Matrix).1 The characteristics of this model are briefly described next.
Every SAM analysis begins with an injection of new money into the economy
this is the direct effect. The direct economic impact of the Coca-Cola system is mostly
the result of operational expenditures from bottlers. This ongoing spending creates
direct income and jobs for individuals in the Coca-Cola system. The SAM then calculates
indirect and induced impacts. The indirect and induced effects derive from several
sources. For example, Coca-Cola bottlers buy supplies in South Africa. The suppliers
receive this income and then spend it, leading to further rounds of income and
expenditure by other businesses and individuals in South Africa. More employment and
income is generated. This indirect effect, along with specific impacts on industries, can
be modeled through the SAM. Moreover, employee income in the Coca-Cola system will
be spent, creating yet another impact, called the induced impact. A SAM can trace these
ripple effects and provide estimates of total employment and income.
Essentially, the SAM offers a complete model of the economy at hand, focusing on
relationships among production activities (various industries), labor, households, and
the public sector. In addition, the SAM offers a way to analyse the total impact on South
African employment (along with skill levels) and income (including its distribution
among different groups).
Typically, the South African SAM identifies 43 activities in the economy
(agriculture, manufacturing, services, government, and other sectors). However, special
modifications are needed to examine the Coca-Cola system. Notably, this analysis
includes sugar-cane growing and sugar refining as a special feature. This is because the
Coca-Cola system is a large user of sugar. So 45 activities (43 regular + 2 sugar related)
are examined in the SAM. The SAM also estimates the inpacts according to labour skills
and household income classes. In the final analysis, the SAM accounts for the complex
interactions among sectors of the South African economy, allowing us to determine the
impact or multiplier effect of the Coca-Cola system. A full description of the SAM
models dimensions is given in Appendix A.
Direct Economic Effects

In this section, we explain the first round of the Coca-Cola systems impactthe
direct injection of spending from the bottlers and other sourcesbased on data obtained
from the Coca-Cola system. This is the starting point for understanding the overall
economic impact (presented later in the chapter). We first look at the bottlers direct
impact on the economy through their direct expenditures (before the multiplier effect
ripples through the rest of the economy). Then we turn to examine other parts of the
Coca-Cola systemexport activity, the regional division office, and distribution (formal
and informal trade). Together, the bottlers and these other activities act as an economic
catalyst, stimulating employment and income for South Africans. The direct effect is
shown in a consolidated table for all relevant activities at the end of this section (table 1).
Direct Bottler Impact
For the bottler direct impact, income and expenditure information was obtained
from surveys conducted during 2003 and 2004. Once the information was compiled,
income and expenditure streams by the bottlers were allocated to industries (see
Appendix B for the bottler survey instrument). Most allocations of income and
expenditure from the survey are straightforward since the instrument was designed to
work with the South African SAM categories. For example, Coca-Cola cans are
considered to be inputs from the metal products industry, Coca-Cola PET bottles are
assumed inputs from the plastic products industry, and so forth.
The bottling system information is shown in table 1 for current expenditure
(columns 1-5) and capital expenditure (columns 6-10). Total direct sales are given in
row 51. The table also shows how different sectors of the South African economy income
from the Coca-Cola bottlers. The product groups that will receive a direct demand
injection from the current expenditures of Coca-Cola bottlers are refined sugar (row 7),
plastic products (row 20), metal products (row 25), other industries (row 33), transport
(row 40) and business services (row 43). The materials imported into South Africa,
mainly concentrate, as can be seen in row 46, while row 49 shows labour inputs. The
bottom of table 1 gives the government revenue estimates. The difference between total
costs (row 50) and revenues (sales in row 51) is shown in row 52.
Coca-Cola bottlers report that they directly employed 9,740 in 2003. As explained
in Chapter 2, this direct employment sits at the core of the Coca-Cola system.
Employment skill distributions are shown in table 2.
Export and Division Office Direct Impacts
Beyond the bottling system, the direct impact of the Coca-Cola system in South
Africa includes the effects of exports from South African businesses to bottlers elsewhere
in Africa. For example, a source of expenditure impact in South Africa arises when
bottlers in other African countries purchase goods from South Africa. This impact offers
a legitimate stimulus to the South African economy. It is important to account for the
effects of these exports and it will be part of the total impact given later in this chapter.
In column 1 of table 3 it can be seen that the direct export amount is about 211 million
rand mainly on refined sugar, plastic, glass and metal products.
Besides exports, the direct impact calculated in this study includes estimates for
the operations of the CCSEAD office. The estimates are shown in the second column of
table 3. It can be seen, for example, that the largest expense associated with the regional
office is on business services, which includes advertising.
Direct Formal and Informal Trade Impacts
So far we have discussed the direct impact of bottler spending, exporting, and the
regional office. The distribution channels used by the Coca-Cola system exert another
direct influence on the South African economy. For example, the gross margins earned
by the formal and informal trade sector will lead to expenditures that can be associated
with the Coca-Cola systems South African activities. These expenditures give rise to
further rounds of income and expenditure in the South African economy.
Table 1. Current and Capital Expenditures by Coca-Cola Bottlers

in South Africa (2003 current R 000)
SIC codes
1
11-13
2
3
21
4
23
5 22, 24, 25, 29
6
301-304
7
8
305-306
9
311-312
10
313-315
11
316
12
317
13
321-322
14
323
15
324-326
16
331-333
17
334
18
335-336
19
337
20
338
21
341
22
342
23
351
24
352
25
353-355
26
356-359
27
361-366
28
371-373
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
374-376
381-383
384-387
391
392
41
42
51
52-53
61-62
63
71
72
81-82
83
93
99
Description
ABI Fortune Forbes Canners

TJC
ABI Fortune Forbes Canners TJC
Current Current Current Current Current Capital Capital Capital Capital Capital
1
2
3
4
5
6
7
8
9
10
Agriculture, forrestry & fisheries,

excluding sugar
0
Sugar cane
0
Coal mining
0
Gold & uranium ore mining
0
Other mining
0
Food
0
Refined sugar
336
Tobacco
0
Textiles
0
Wearing apparel
1
Leather & leather products
0
Footwear
0
Wood & wood products
0
Paper & paper products
23
Printing, publishing & recorded media
1
Coke & refined petroleum products
33
Basic chemicals
12
Other chemicals & man-made fibres
0
Rubber products
0
Plastic products
254
Glass & glass products
0
Non-metallic minerals
0
Basic iron & steel
0
Basic non-ferrous metals
0
Metal products excluding machinery
4
Machinery & equipment
36
Electrical machinery
0
Television, radio & communications
equipment
0
Professional & scientific equipment
1
Motor vehicles, parts & accessories
0
Other transport equipment
0
Furniture
0
Other industries
611
Electricity, gas & steam
19
Water supply
18
Building construction
0
Civil engineering & other construction
5
Wholesale & retail trade
0
Catering & accommodation services
12
Transport & storage
214
Communication
17
Finance & insurance
61
Business services
127
Other services
138
Other
56
Imported
808
Gross Operating Surplus (payments,
interest and others)
189
Subtotal
2,974
Wages & Salaries
580
Total inputs
3,554
Sales
4,589
Gross Operating Surplus (surplus
before tax)
1,035
Gross Operating Surplus (total)
1,224
Indirect taxes on production
12
Indirect taxes on products
0
Direct tax
297
0
0
0
0
0
0
149
0
0
2
0
0
0
4
0
33
100
0
0
96
0
0
0
0
3
43
0
0
0
0
0
0
0
69
0
0
0
0
0
0
3
0
6
2
0
0
65
0
0
0
0
1
1
0
0
0
0
0
0
144
0
0
0
0
0
0
3
0
1
11
0
0
62
0
0
956
0
0
1
0
0
0
0
0
0
0
39
0
0
0
0
0
0
1
0
6
1
0
0
39
0
0
1
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
229
0
0
0
0
49
77
0
0
0
0
0
0
0
0
0
0
0
19
0
0
0
0
0
0
3
0
0
0
0
0
0
51
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
13
0
0
0
0
0
7
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
13
0
0
0
0
6
5
0
0
0
0
0
0
0
7
7
0
8
0
68
0
6
12
212
35
18
357
0
0
0
0
0
2
1
0
0
0
0
12
4
2
21
6
14
156
0
0
0
0
0
5
5
4
0
0
0
1
2
5
1
3
1
1
344
0
0
0
0
0
12
1
0
0
0
0
2
4
1
1
7
3
2
92
0
72
0
8
0
0
0
0
0
0
0
0
0
0
0
0
15
0
0
0
7
0
0
0
0
0
0
0
0
0
0
0
11
0
19
0
0
0
0
10
0
0
0
0
0
4
0
0
0
0
0
0
0
0
0
0
16
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
5
0
0
0
0
0
0
0
0
0
0
0
1
0
1
1
0
1
79
1,242
126
1,368
1,705
17
381
22
403
836
102
1,651
315
1,965
2,631
14
227
33
260
348
0
451
0
0
0
0
111
0
0
0
0
50
0
0
0
0
0
0
0
0
0
34
0
0
0
337
416
4
0
97
433
449
19
0
131
666
769
13
0
167
88
102
2
0
22
0
451
0
0
0
0
111
0
0
0
0
50
0
0
0
0
0
0
0
0
0
34
0
0
0
Source: CCSEAD.
Table 2: Labour Skill Distribution by

DIRECT FORMAL TRADE IMPACT
Coca-Cola Bottlers in South Africa
The direct impact of trade in
the formal sector is based on specific
Employment
Wage
trading margins for wholesale and
distribution
distribution
retail; that is, the income (margin)
1
Highly skilled
13.4%
19.0%
gain from sales (turn0ver).
2
Skilled
37.3%
40.8%
Total turnover by the Coca3
Low skilled
49.2%
42.2%
4
Total
100.0%
100.0%
Cola bottlers is drawn from the
bottler surveys (given in the
Source: CCSEAD.
appendix). Using the average markup rate of 25 percent for wholesale
and 26-30 percent for retail and the bottlers information on sales by channel, the
impact model calculates a total mark-up of about 1.6 billion rand. With the mark-up and
the expenditure patterns of the trade sector as shown in the Social Accounting Matrix, an
estimate is obtained for the formal trading sectorthe spending pattern from Coca-Cola
derived income. This impact is shown in column 3 of table 3.
As expected, it can be seen that the expenditure pattern of the trade sector mainly
favours other tertiary sectors, such as transport, business services, financial and
insurance services as well as the paper and printing and construction industries.
DIRECT INFORMAL TRADE IMPACT
One of the unique contributions of this study is to model the direct and total
impact of informal trading activitythe income attained by selling Coca-Cola products.
Income and expenditure associated with the Coca-Cola system sales by informal traders
is drawn from a 2003 survey undertaken by the Bureau of Market Research (BMR),
University of South Africa. Obtaining an estimate of total income and expenditure
associated with the sales of Coca-Cola products in the informal sector required
estimating the size the market for Coca-Cola products. Because this type of analysis
required a number of assumptions and an original modeling approach, we explain our
methods next in some detail. Readers mainly interested in the total impact of the
Coca-Cola system may want to proceed to the next major section of this chapter.
The starting point of sizing the market is the average number of products sold by
type of package (Question 34, table 67A in Chapter 4). The selling price and cost price as
well as the mark-up are available from the BMR survey (table 69A in Chapter 4).
Adjusting for the number of respondents as to how much they are selling Coca-Cola
products in a particular type of package, we can then calculate the estimated turnover.
The results are shown in table 4. For example, in the last row it can be seen that
an average spaza shop is estimated to sell 57,000 rand worth of Coca-Cola products per
annum, shebeens: 89,000 rand, hawkers: 47,000 rand and other vendors 56,000 rand
per annum.
Next, the research team had to make some assumptions to arrive at the number of
informal vendors. Basically, the total population of informal ventors was estimated by
taking the number for each informal trade type from a previous study of the Coca-Cola
systems impact in South Africa (completed in 1998) and then increasing it with the
demographic growth rate of the black population. The proportion of vendors that
Table 3: Current and Capital Expenditures by Coca-Cola Related Activities

SIC Codes
1
11-13
2
3
21
4
23
5 22,24,25,29
6
301-304
7
8
305-306
9
311-312
10 313-315
11
316
12
317
13 321-322
14
323
15 324-326
16 331-333
17
334
18 335-336
19
337
20
338
21
341
22
342
23
351
24
352
25 353-355
26 356-359
27 361-366
28 371-373
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
374-376
381-383
384-387
391
392
41
42
51-53
61-62
63
71
72
81-82
83
93
99
Description
Agriculture, forrestry & fisheries
excluding sugar
Sugar cane
Coal mining
Other mining
Food
Refined sugar
Tobacco
Textiles
Wearing apparel
Footwear
Basic chemicals
Rubber products
Plastic products
Basic iron & steel
equipment
Furniture
Other industries
Water supply
Building construction & engineering
Transport & storage
Communication
Finance & insurance
Business services
Other services
Other
Government services
Imported
Gross Operating Surplus (payments,
interest and others)
Subtotal
Wages & Salaries
Wages & Salaries unskilled
Wages & Salaries skilled
Wages & Salaries highly skilled
Indirect taxes on production
Direct taxes
Household income
Total
Total
Exports
1
Total
CCSEAD
2
Total
Formal Trade
3
Total
Informal
Trade
4
Informal
Trade Capital
Expenditure
5
0
0
0
0
0
0
27,752
0
0
0
0
0
0
0
0
0
0
0
0
35,617
18,831
0
0
0
128,716
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
125
26
0
0
0
3,596
0
0
0
4,439
0
175
2,128
35,515
40,673
19,321
586
5,077
192
12,422
75
6,323
0
0
6,495
8,956
2,280
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
22,195
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,157
0
0
0
0
0
0
11,798
45,709
0
0
0
0
35,523
52,533
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
16,157
4,847
0
0
382,924
0
16,157
497
0
6,057
54
4,941
2,961
14,067
2,733
20,432
73,333
10,789
73,634
108,582
104,405
165,030
0
8,927
0
0
0
0
0
0
0
122,526
0
0
0
0
103,427
34,074
4,167
0
27,476
3,588
0
0
0
28,455
0
203
35
0
0
8,127
0
0
0
0
0
487
0
1,513
0
17,785
0
0
0
210,916
413,290
72,707
2,946
22,396
47,365
495,185
85,164
265,330
144,691
36,530
492,793
1,653,320
Source: CCSEAD, BMR and own calculations
205,744
1,078,881
1,602,077
203,324
actually sell Coca-Cola products are kept at the same level as the previous study,
assuming that no further penetration of the market was achieved.
The results for sizing the informal market are shown in the table 5. The first
column repeats the sales information from the last row of the previous table. The second
column reveals that applying the demographic growth rate of the black population of 9.1
percent over the period 1998-2003 (or 1.8 percent compounded per annum) to the
number of spaza shops of 60,000 in 1998 results in an estimated total of 66,000 in
2003. Given the proportions of vendors that sell Coca-Cola products, as shown in
column 3, we then arrive at total economy-wide annual turnover of Coca-Cola products
in the informal sector of 6 billion rand (see last column of table 5).
The South African SAM is then used to determine the spending stimulus. That is,
as the income from the sale of Coca-Cola products is spent, informal trade acts as a
catalyst to spur economic activity. This stimulus is given in the last two columns of
table 7 for current and capital spending.
To estimate the direct employment impact from informal trade, the survey gives
the average number of people employed per type of business (Question 17, tables 38-41),
the average number family members employed per type of business (Question 23), as
well as the proportion of the business run by the owner (Question 20). Multiplying
through with the estimated number of businesses we get the results shown in table 6.
According to these estimates, the direct number of workers supported by informal
trade of Coca-Cola products is approximately 55,000. This number reflects the amount
of employment generated by trade margins from Coca-Cola productsnot the number of
vendors selling Coca-Cola products.
TOTAL DIRECT IMPACTS
Given all the expenditures and income associated with the sale of Coca-Cola in
South Africa now mapped outthat is, the bottlers, exports, and trading activities
discussed so farwe can now calculate the total direct impact. All direct economic
stimuli are consolidated into table 7.
Note that in column 1 of table 7 we present the consolidated injection created by
the bottlers, followed in column 2 by their capital expenditures. In column 3 we report
on the exports created by demand for South African products emanating from other
bottlers in Southern and Eastern Africa. Injections created by trading margins of formal
and informal trade are shown in columns 5 and 6 while column 7 shows capital
expenditure associated with trading in the informal sector. The next last column of the
table summarizes all injections.
In row 59 of table 7 it can be seen that the bulk of the total injection created by the
Coca-Cola systems activities in South Africa is accounted for by the bottlers, followed by
almost equal contribution of 13 percent by the downstream formal and informal trading
activities.
Summed over all these injections of spending in the Coca-Cola system, we can see
in the last two columns the refined sugar, plastics industry, metal products, transport
and business service industries are likely to benefit most directly. Other direct
beneficiaries include capital and labour, as well as direct income earned by households,
mostly those in the 40 percent- 50 percent income decile.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
500 ml returnable glass bottle

300 ml non-returnable glass
2 litre non-returnable plastic bottle
1.5 litre non-returnable plastic
1.5 litre returnable plastic bottle
1.25 litre returnable glass bottle
750 ml non-returnable plastic
450 ml can
340 ml can
250 ml can
200 ml can
1 litre tetra (box)
250 ml tetra (box)
200 ml tetra (box)
200 ml pouch
Total sample / Total
Product
70
53
12
5
8
14
61
170
52
7
48
130
3
3
6
0
2
28
340
15
20
10
15
10
23
26
16
15
11
13
17
17
17
15
0
10
15
0
3.69
2.36
4.20
2.26
9.22
7.12
6.58
5.81
5.61
1.96
3.80
3.79
3.55
2.46
5.00
1.25
1.27
1.30
4,239.80
2,685.54
541.06
181.96
791.84
2,446.24
11,160.13
17,272.69
4,816.55
168.65
2,610.17
8,748.47
190.59
132.07
483.09
0.00
27.27
600.21
57,096.34
Spaza/tuck shop
N Mean price Turnover
27 15
16 74
4 13
3 13
1 10
1 20
32 42
90 27
18 11
4 13
20 13
61 42
1120
3 13
3 10
0 0
0 0
1 10
170 0
3.90
2.78
2.10
2.35
8.62
6.16
6.78
5.89
5.71
2.00
3.88
3.90
3.55
3.42
5.00
1.25
1.30
1.30
36
27
13
10
0
10
13
15
10
0
16
20
10
20
15
0
0
16
0
3.95
2.36
3.82
2.00
9.99
7.00
6.74
5.91
5.78
2.02
3.82
3.89
3.50
3.42
5.00
1.25
1.30
1.30
Other
N Mean price
4.09 12,826.09 21 12
2.24
3,292.02 17 17
2.40
293.96 6 10
2.00
48.99 2 15
7.75
0.00 3 10
7.00
342.95 3 10
6.90
675.94 11 12
5.89 4,904.83 36 29
5.71
1,678.51 11 11
2.00
0.00 0 0
3.91
4,981.42 16 18
3.92 16,422.51 47 23
3.33
489.44 4 13
3.42
167.56 2 20
5.70
418.89 1 10
1.43
0.00 0 0
1.30
0.00 1 30
1.28
344.82 4 13
46,887.94104 0
Hawker
3,434.24 36
7,043.21 22
225.44 4
201.77
1
185.08 0
264.52 2
19,653.19 3
30,354.62 23
2,330.32 12
214.54 0
2,165.95 33
21,350.83 85
914.65 6
293.64 1
322.06 2
0.00 0
0.00 0
27.91 7
88,981.98 149
Type of business
Shebeen
3,464.36
2,402.15
804.40
210.58
1,051.83
737.02
3,075.60
21,983.02
2,434.47
0.00
3,753.88
14,745.42
614.18
480.12
175.48
0.00
136.88
228.13
56,297.50
Turnover
Table 4. Sizing the Annual Market for Coca-Cola Products Trade in the Informal Sector
(winter sales, 365 days per annum)
Table 5. Sizing the Informal Market for Coca-Cola Products

Type of outlet
Annual sales (Rm) per unitNumber of outlets
vendors that sell Coca-Cola products Annual sales (Rm) per type
Type of outlet
1
2
3
4
5
Annual sales (Rm)

per unit
Spaza/tuck shop
Shebeen
Hawker/Street vendor
Other informal outlets
Total
57,096
88,982
46,888
56,298
Number of
outlets
65,668
25,089
142,245
18,108
Proportion of
Proportion
of vendors
that sell
Coca-Cola
products
95%
80%
5%
37%
Annual sales
(Rm) per type
3,561,946,988
1,785,989,657
333,478,475
377,188,130
6,058,603,249
Source: BMR Informal Sector survey of Coca-Cola products 2003 and 1998 and own calculations
Table 6. Employment in Informal Sector Trading of Coca-Cola Products:

Jobs Supported by Coca-Cola System Sales, by Type of Business
Employment
Spazas
Shebeens
Hawkers
Other
Total
Total average Work done

employment
by owner
(including
working
owners)
33,430
9,481
6,807
5,538
55,255
11,186
3,517
3,816
1,690
20,209
Work by
family
member
20,143
4,839
2,042
2,154
29,178
Work outside
the family,
i.e., on the
payroll
2,100
1,125
949
1,694
5,869
Source: BMR Informal Sector survey of Coca-Cola products 2003 & 1998, and own calculations
Overall Economic Impact

With all direct expenditures associated with the sale of the Coca-Cola system in
South Africa consolidated into table 7, we have all the necessary ingredients to present
the total impact. Now we turn to the results of the impact modeling, based on the South
African Social Accounting Matrix. Recall that the SAM accounts for the indirect and
induced effects of Coca-Cola system activities along with the direct effects presented in
table 7.
The results of the SAM modeling of all effects on the South African economy are
given in table 8. As before, in column 1 we present the consolidated results created by
the bottlers, followed in column 2 by their capital expenditures. In column 3 we report
the impact of exportsdemand for South African products emanating from other
bottlers in Southern and Eastern Africa. In column 4 we see the effects of the division
office. Next, impacts created by trading margins of formal and informal trade are shown
in columns 5 6. Column 7 shows the impact of the capital expenditure associated with
trading in the informal sector. The last column of the table summarizes all impacts.
Table 7. Consolidated Expenditures Associated with

Coca-Colas Activities in South Africa (2003 R 000)
SIC codes
Description
Current,
bottlers
1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62

excluding sugar
0
Sugar cane
0
21
Coal mining
0
23
0
22, 24, 25, 29 Other mining
0
301-304
Food
0
Refined sugar
735,700
305-306
Tobacco
0
311-312
Textiles
0
313-315
Wearing apparel
3,039
316
0
317
Footwear
0
321-322
0
323
34,100
324-326
516
331-333
78,488
334
Basic chemicals
125,526
335-336
0
337
Rubber products
0
338
Plastic products
516,100
341
0
342
0
351
Basic iron & steel
956,500
352
0
353-355
7,805
356-359
81,676
361-366
0
371-373
Television, radio & communicationss
equipment
0
374-376
930
381-383
0
384-387
0
391
Furniture
0
392
Other industries
627,624
41
32,952
42
Water supply
30,799
51-53
286
61-62
13,949
63
0
71
Transport & storage
82,533
72
Communication
231,481
81-82
Finance & insurance
32,372
83
Business services
77,469
93
Other services
370,455
99
Other
184,249
Government services
91,036
Gross Operating Surplus (total
before tax)
2,960,608
432,590
439,116
203,937
HH Decile 30%-40%
0
HH Decile 40%-50%
0
HH Decile 50%-60%
0
Government revenue (imp tax)
0
Government revenue (oth comm tax)
0
Government revenue (activity tax)
49,121
Government revenue (direct tax)
713,884
Imports
1,757,132
Total expenditure
10,108,966
Total expenditure % of total injection
69.1%
Employment highly skilled
3,463
Employment skilled
2,626
Employment unskilled
943
Capital,
CCSEAD
bottlers Exports Office
2
Current,
formal
traders
5
Current, Capital,
Total
Share in
informal informal injection
total
traders traders (spending) injection
6
7
8
9
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
125
26
0
0
0
3,596
0
0
0
4,439
0
175
2,128
35,515
40,673
19,321
586
5,077
192
12,422
75
6,323
0
0
6,495
8,956
2,280
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
22,195
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,157
0
0
0
0
0
0
11,798
45,709
0
0
0
0
35,523
52,533
125
26
0
0
0
3,596
763,452
0
0
7,478
20,153
175
3,285
69,615
41,190
97,809
126,111
30,389
192
831,360
64,615
6,323
956,500
0
249,689
215,342
54,813
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5.2%
0.0%
0.0%
0.1%
0.1%
0.0%
0.0%
0.5%
0.3%
0.7%
0.9%
0.2%
0.0%
5.7%
0.4%
0.0%
6.5%
0.0%
1.7%
1.5%
0.4%
0
0
0
0
0
0
0
0
0
0
0
0
0
2,468
0
2,307
0
0
0
0
0
0
0 15,338
0
4,602
0
2,425
0
6,736
0 363,522
0 21,906
0 16,335
497
0
6,057
54
4,941
2,961
14,067
2,733
20,432
73,333
10,789
73,634
108,582
104,405
165,030
0
8,927
0
0
0
0
0
0
0
122,526
0
0
0
0
103,427
34,074
4,167
0
27,476
3,588
0
0
0
28,455
0
203
35
0
0
8,127
0
0
0
0
0
487
0
1,513
0
501
94,837
34,512
8,744
5,144
630,621
172,014
40,211
28,845
87,282
10,789
274,932
378,739
155,126
249,721
781,664
235,824
107,372
0.0%
0.6%
0.2%
0.1%
0.0%
4.3%
1.2%
0.3%
0.2%
0.6%
0.1%
1.9%
2.6%
1.1%
1.7%
5.3%
1.6%
0.7%
11-13
0
0
0
0
0
0
0
0
0
0
20,153
0
0
0
0
0
0
3,117
0
255,423
0
0
0
0
106,674
89,188
0
4
93,907
0
8,690
0
0
0
4,373
0
0
0
0
0
11,758
0
20,212
15,641
0
0
0
0
0
0
0
0
0
0
0
0
16,762
645,900
4.4%
0
0
0
0
0
0
0
0
0
27,752
0
0
0
0
0
0
0
0
0
0
0
0
35,617
18,831
0
0
0
128,716
0
0
0 28,806
413,290
0
0
0
3,643
433
0
0
0 30,402
204
0
0
0 63,629
144,691
0
0
0
0
0 279,309
0
0
0
0
653,393
0
0
0
0
351,923
0
0
0
0
0
0
0
0
0
0
0
0
0
36,530
0
0
0
0
0
39,436
0
0
0
0
0
17,785
210,916 562,120 1,303,463 1,602,077 203,324
1.4%
3.8%
8.9%
10.9%
1.4%
0
22
0
32,879
0
0
172
0
22,377
0
0
112
0
0
0
Source: CCSEAD.
Note: Rows 1-45 represent the activities (from agriculture to government services) identified in the SAM.
3,402,704 23.2%
436,665
3.0%
469,722
3.2%
412,257
2.8%
279,309
1.9%
653,393
4.5%
351,923
2.4%
0
0.0%
0
0.0%
85,652
0.6%
753,320
5.1%
1,791,678 12.2%
14,636,766 100.0%
100.0%
36,363
25,175
1,055
Thus, this column is the end result of the impact model, including the total employment
estimate for the Coca-Cola system input.
Current expenditure
Since table 8 represents the summary of the impact analysis, it is worth
examining in some detail. For example, in the first column we can see the impact of
current spending by bottlers on different activities (industries) of the South African
economy. Rows 1-46 represent increases in gross output in different sectors or
activitiesfrom agriculture to manufacturing and services.. Gross output is the broadest
economic impact measure. The sectors that are likely to benefit most directly and
indirectly are agriculture, food, sugar refineries, plastic products, iron & steel, trade,
transport, communication, finance, and business services. Some of these activities did
not benefit directly from the bottlers expenditures; instead, their output is affected
indirectly for the most part. Examples are agriculture, iron & steel, and trade. Row 46 of
table 8 reveals that overall output in the South African economy will increase by more
than 17 billion rand. As can be seen in the next row, this implies an output multiplier of
about 1.7.
Net output, as opposed to gross output, is perhaps a better indicator of the
Coca-Cola systems contribution to the South African income. Net output accounts for
the value added by the activities benefiting from the bottlers expenditures. The
components of value added (at factor costs) are shown in rows 48 51. It can be seen
that the gross operating surplus appropriates a large share of value added. The rest of
the value added is spread across high-, medium-, and low-skill workers. This will have
implications for the impact on income distribution. For current spending alone, the
impact on GDP (at factor costs) is expected to be around 12 billion rand.
In rows 54 56 of table 8 we present the impact on household income as a
percentage change from the base income of these households. It can be seen that high
income households are expected to benefit more than low income households. Although
the impact includes both direct and indirect effect, the former typically dominates.
Moreover, while Coca-Cola bottlers do not necessarily favour highly skilled labour over
unskilled labour, the large proportion of value added appropriated by the production
factor capital is, given economy-wide averages, mainly distributed to high income
households. Note that, due to lack of any further information on the shareholding of
Coca-Cola bottlers, we make use of economy-wide average distribution patterns. This
may not necessarily reflect the current distribution policies of the bottlers. It does
indicate, however, that an effective way of influencing the distributional outcome of the
Coca-Cola systems activities in South Africa is to broaden the shareholding of the
bottlers towards the lower income section of the households.
Next, we present the impact on government income. In row 57 it can be seen that
given the direct taxes paid by the bottlers, and, if all the backward linkages materialize
and every beneficiary gets taxed at the economy-wide average collection rates, tax
revenues associated with the bottlers activities amount to almost 3.5 billion rand. Based
on the same assumptions we calculate the potential impact on imports to be 4 billion
rand.
Finally, we report the potential impact on employment for current spending
associated with the Coca-Cola system in South Africa. The results are shown in rows
59 62. The impact on total employment is more than 70,000.
Table 8. Consolidated impact of the Coca-Cola System

SIC codes
Description
Current,
bottlers
Capital,
bottlers Exports
1
1
11-13
2
3
21
4
23
5
22, 24, 25, 29
6
301-304
7
8
305-306
9
311-312
10
313-315
11
316
12
317
13
321-322
14
323
15
324-326
16
331-333
17
334
18
335-336
19
337
20
338
21
341
22
342
23
351
24
352
25
353-355
26
356-359
27
361-366
28
371-373
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
374-376
381-383
384-387
391
392
41
42
51-53
61-62
63
71
72
81-82
83
93
99

excluding sugar
702,852
47,666
Sugar cane
151,481
1,408
Coal mining
207,518
13,047
5,111
380
Other mining
343,746
21,794
Food
946,535
66,758
Refined sugar
523,379
4,115
Tobacco
419,987
26,974
Textiles
135,539
14,123
Wearing apparel
95,277
6,642
11,851
17,378
Footwear
34,548
2,166
66,128
5,464
305,244
33,029
155,076
11,254
461,404
36,557
Basic chemicals
414,067
70,721
382,819
37,007
Rubber products
53,469
3,763
Plastic products
442,294
175,150
27,059
4,231
48,011
3,874
Basic iron & steel
993,884
42,478
137,941
16,299
224,485 102,345
131,783
37,379
65,998
7,898
equipment
25,909
1,964
15,158
11,129
352,662
26,990
15,862
3,750
Furniture
59,939
5,233
Other industries
301,924
7,615
361,804
25,534
Water supply
171,337
15,972
111,945
8,262
2,155,692 186,427
248,150
16,263
Transport & storage
1,041,650
78,803
Communication
845,724
38,516
Finance & insurance
1,352,582 109,309
Business services
1,236,352
86,351
Other services
660,855
38,366
Other
611,858
44,107
Government services
135,159
2,446
Output
17,192,050 1,516,936
Output multiplier
1.7
2.3
Gross Operating Surplus (total before tax) 7,084,498 313,859
1,452,544 113,004
1,983,647 131,823
1,360,378 102,192
GDP
11,881,067 660,878
GDP multiplier
1.2
1.0
HH D0-D3 (% increase from base)
1.0%
0.1%
1.2%
0.1%
1.3%
0.1%
Government revenue
3,466,063 168,044
Imports
4,162,366 197,755
Employment highly skilled (average)
41,223
2,318
Employment skilled (average)
24,895
1,742
Employment unskilled (average)
6,828
451
Employment total (average)
72,947
4,511
CCSEAD
17,933
5,444
7,214
183
10,922
23,005
18,929
10,244
3,921
2,329
310
830
1,936
9,240
3,921
11,778
14,222
10,432
1,393
26,447
14,027
1,577
35,349
11,532
105,991
5,521
2,921
50,467
1,654
9,476
326
11,533
72,300
4,575
31,228
9,900
7,489
908
2,619
4,722
20,518
14,560
32,289
19,690
44,046
4,415
6,940
1,796
3,975
9,397
5,007
9,397
7,161
5,481
596
1,954
360
2,545
12,360
27,691
406
1,188
1,601
4,871
1,852
5,226
10,858
28,166
3,148
15,852
3,040
11,204
66,215
141,893
5,791
21,308
28,158
76,193
16,687
54,753
35,486
109,578
31,139
121,552
7,420
362,193
13,598
50,823
713
29,448
596,978 1,458,309
2.8
2.6
124,781
398,112
46,508
72,936
48,854
159,120
34,905
202,736
255,048 832,904
1.2
1.5
0.0%
0.1%
0.0%
0.1%
0.0%
0.1%
63,094
199,554
66,874
170,928
1,138
2,318
650
1,863
169
588
1,957
4,770
Current, Current,
formal informal
traders traders
5
6
Capital,
informal
traders
7
Total
economic
impact
10
273,061
8,300
44,514
934
32,875
399,925
26,070
180,667
40,364
36,779
4,091
13,879
15,994
60,117
36,197
92,027
59,439
104,573
11,793
23,980
6,365
11,686
27,853
14,297
30,411
23,317
17,344
12,609
366
3,039
270
6,786
16,461
1,060
7,362
3,306
1,649
334
597
2,787
7,389
3,075
8,772
9,966
7,557
1,313
12,176
32,426
2,298
8,361
7,353
7,301
13,514
32,166
1,210,361
171,768
304,899
8,259
454,418
1,670,766
587,391
740,236
227,141
166,054
36,860
60,077
110,602
520,661
282,227
714,759
627,898
642,439
84,991
709,699
89,745
86,462
1,140,181
204,101
506,378
237,584
144,800
5,370
6,269
2,244
2,719
61,378
74,274
2,665
4,381
11,279
18,907
10,194
11,628
63,071 216,470
23,254
39,508
43,684
32,816
350,781
537,615
47,231
61,652
188,687 327,377
203,962
193,170
359,959 337,447
320,693 242,461
50,659
115,016
82,207 127,734
4,960
9,252
2,719,078 3,955,549
2.1
2.5
1,142,585 1,002,595
131,612 220,792
275,496 362,735
331,895 260,755
1,881,589 1,846,876
1.4
1.2
0.1%
0.7%
0.2%
0.7%
0.2%
0.2%
459,395 598,032
357,417 523,475
4,641
42,379
3,291
28,129
890
1,530
8,822
72,038
1,321
281
32,491
332
1,243
1,251
7,227
2,302
11,266
55,653
4,422
21,994
10,884
26,611
24,750
5,334
11,538
516
429,711
2.1
90,323
29,982
35,408
27,189
182,901
0.9
0.0%
0.0%
0.0%
47,015
70,966
675
507
132
1,315
43,383
34,435
587,848
28,584
103,073
339,689
713,130
271,373
222,217
3,494,276
404,816
1,762,861
1,363,696
2,330,972
2,063,298
1,239,844
941,866
182,493
27,868,611
1.9
10,156,753
2,067,378
2,997,083
2,320,049
17,541,263
1.2
1.9%
2.4%
1.9%
5,001,197
5,549,781
94,693
61,078
10,589
166,360
105,773
3,115
20,092
1,054
26,762
145,781
9,263
63,773
19,987
15,890
1,988
5,436
13,571
85,124
58,144
71,932
39,792
56,005
8,846
22,713
3,841
15,041
22,858
11,671
26,448
18,909
12,990
Source: Social Accounting Matrix (SAM) calculations for South Africa.
Note: Rows 1-45 represent the activities (from agriculture to government services) identified in the SAM.
Capital expenditure
Column 2 of table 8 shows the estimated total impact of Coca-Cola bottlers
capital spending. In column 2, it can be seen that the likely impact of Coca-Cola bottlers
capital expenditure on the South African economy is relatively modest. The main reason
is that the initial outlay, as reported by the bottlers is small compared to their current
expenditure. The industries that are expected to benefit most directly are plastic
products, iron & steel, and metal products. Indirectly, it can be seen from the table 8,
other sectors such as the services industries but also food and agriculture. The latter is
typically due to labour income earned during the manufacture of direct and indirect
supplies to satisfy these capital expenditures. Total gross output amounts to just over 1.5
billion rand which, given the initial capital expenditures of 650 million rand implies a
multiplier of 2.3. This is slightly higher than the output multiplier of the current
expenditures, mainly because the import leakages are much lower. Evidently, capital
expenditure is less import intensive, which makes sense as a large part is spent on locally
manufactured glass and vehicles.
GDP at factor costs associated with the capital expenditures of Coca-Cola bottlers
capital expenditures are shown in rows 48 51 and amounts to about 660 million rand
which implies a GDP multiplier of 1.0. In rows 54 56, it can be seen that the impact on
household income is small, only showing percentage changes in the first decimal. Given
the economy-wide average tax collection rates, government income associated with the
capital expenditures is about 170 million rand, while direct and indirect imports are
estimated at 200 million rand. The capital expenditures require the support of about
4,500 person year equivalents.
Export Impacts
Exports of South African industries to Coca-Cola bottlers elsewhere in Southern
and Eastern Africa offer another stimulus to the South African economy. We present the
impact of these exports in column 3 of table 8.
The main beneficiaries are mainly refined sugar, plastic and metal products.
Indirectly, food, agriculture, and iron & steel also benefit along with the usual tertiary
sectors. Total output is expected to rise by about 600 million rand which implies a
multiplier of about 2.8. The reason for the output multiplier to be much higher than
those for current as well as capital expenditure of the bottlers is the relatively low
imports, as can be seen in row 58.
The government receives about 60 million rand worth of revenues associated with
these imports, while imports are about 66 million rand. The latter has to be seen in the
context of the initial 200 million rand export injection, so that the net effect on the trade
balance is not more than 140 million rand.
Coca-Cola Southern and East Africa Division Office
Next we turn to column 4 of table 8. The beneficiaries of the expenditures of the
Coca-Cola Southern & East Africa Division office are business servicesadvertising in
particular. In addition, other tertiary industries that benefit (directly or indirectly) are
financial services, trade, transport, and communication. Total gross output associated
with these expenditure is estimated to be 1.5 billion rand, which, given estimated
expenditures of 560 million rand, implies a relatively high output multiplier of 2.6. The
reason is that there are relatively low direct and indirect imports involved, as most
expenditures are channeled through the tertiary sector. Similarly, GDP is expected to
benefit to the tune of more than 800 million rand which entails a multiplier of around
1.5. Close to 5,000 workers are expected to be supported by these expenditures if we
assume employment-output elasticities of unity (as we have in all the employment
impact calculations).
Formal Trade Impacts
As explained earlier, we estimated the total margin derived by formal traders
from the sales of Coca-Cola products. With that margin, formal traders will be able to
finance part of their current expenditures. (At this stage we ignore capital expenditures
associated with this margin). The pattern of current expenditures is based on industry
averages and not on expenditures associated specifically with the sales of Coca-Cola
products. Nevertheless, we will get some idea of the backward linkages when applying
the same methodology discussed and implemented above with regard to the other
expenditures.
In column 5, we present the results of the application of our SAM based impact
framework. It can be seen that a general increase in the expenditures by the wholesale
and trade sector benefits paper products and fuel, as well as food, beverages, agriculture,
and services. Given the initial expenditures of 1.6 billion rand, the total impact on gross
output is expected to be just under 3.5 billion rand, implying an output multiplier of 2.1.
The value added that is generated in the process is shown in rows 48 51 to
amount to about 2.3 billion rand and a relatively high GDP multiplier of around 1.6.
Given that the initial income distribution patterns embedded in the SAM are skewed in
favour of high income households, the expenditures by the trade sector will also favour
poor households less, as can be seen in rows 54 56. Government income associated
with this expenditure is about 600 million rand, including all types of taxes. Imports
that are necessary to sustain these expenditures amount to less than 500 million rand,
hence the relatively high GDP multiplier shown in row 53 and employment supported by
the formal trade in Coca-Cola products, based on the unit employment output elasticity,
amounts to just over 12,000. Finally, it should be noted that we assume that no
additional capital expenditure is required by formal sector traders so as to take
Coca-Cola products to the market, i.e., existing capital stock is deemed to be sufficient.
Informal Trade Impacts
Based on the assumptions we made with regard to informal trading in Coca-Cola
products, we had estimated a similar injection to the South African economy as the one
emanating from the formal trade in these products. However, the 1.6 billion rand
injection has a slightly different impact on the South African economy as can be seen in
column 6.
Interestingly, the impact of informal trading on output is higher than formal
trading, although the impact on GDP is lower. The reason for the latter can be explained
by the fact that a large part of the expenditures of the informal sector are allocated
directly to households, including owners income and labour income of family members,
bypassing the GDP accounting for reasons mentioned above. With a lower direct impact
on (formal) GDP, the total (direct plus indirect) impact will also be lower than formal
sector trading.
The main sectors (higher up in the column) that are expected to benefit from
informal trading are food and beverages (and consequently agriculture as well), some
chemicals, electricity, and finally a range of tertiary industries.
The direct impact of transfers to owner households also dictates the income
distribution outcome, with most of the gains being made by the middle household
income class, followed by the high household income class, but relatively low gains for
the low household income class.
The biggest impact of informal trading in Coca-Cola products is, however, made
in terms of employment creation. Again, driven mainly by the direct employment of
owners and family and also outside labour contracts, the total impact on employment is
estimated to be about 72,000 based on unit employment output, of which 55,000 are
estimated to be created directly.
The only similarities between the analysis of informal and formal trading is the
impact on government revenue and imports. Estimated at 600 million rand and 500
million rand, respectively, both are more or less the same for formal and informal sector
trading. This implies that, informal sector trading is estimated to double the income of
the government from formal sector trading of Coca-Cola products.
Finally, we report on the impact of informal sector capital expenditure. The total
impact is estimated to be around 400 million rand, with a multiplier of around 2.1, but
the impact on GDP is less than 200 million rand. The reason is that capital expenditure,
as with the bottlers, does not involve the remuneration of the production factors capital
and labour directly, only indirectly do these accounts benefit. There are expected to be
about 1,200 full time equivalent workers associated with this expenditure.
Conclusions
We conclude that the Coca-Cola system has a significant impact on the South
African economy. The overall economic effects are shown in the last column (10) of
table 8. It can be seen that the total impact on gross value of production (the broadest
measure of economic impact) is considerable: estimated to be 28 billion rand in 2003
(see line 46). Table 8 also reveals the main sectors expected to benefit (in the first 44
rows, last column): food, plastic products, iron & steel products, petroleum refineries,
other chemicals, motor vehicles, electricity, and wholesale and retail trade. Business
service impacts (including advertising) are also strong, as are the Coca-Cola systems
effects on the finance and insurance industries of South Africa. The upstream
agriculture sector benefits substantially as well, notably sugar-cane growers. As can be
seen in Column 10 of table 10, about 170 million rand worth of gross economic output in
the sugar growing industry is expected to be associated with the Coca-Cola systems
activities in South Africa. Note also that sugar refiners gain 587 million rand in economic
output.
Among the major findings presented in table 8, one in particular stands out: the
impact of the Coca-Cola systems activities on South Africas gross domestic product
(GDP). This is shown to be 17.5 billion rand (row 52, column 10). For 2003, the
Coca-Cola system, along with the economic linkages described in this study, represent
about 1.4 percent of the countrys total GDP. Next consider how household income is
distributed according to the final South Accounting Matrix calculations. The household
income distribution emanating from the Coca-Cola system is shown in rows 54 56 of
table 8. The categories in these rows refer to deciles (D0-D10) of the South African
household (HH) income distribution. The numbers here give the percent increase from
the household base for 2003, for low-, middle- and high-income groups. The results
show that middle-income households gain most from Coca-Cola activities.
Total government income associated with the Coca-Cola system activities is
estimated to be around 5 billion rand. This includes direct and indirect taxes at the
current collection rates which may deviate from the actual collection rates.
Finally, the employment impact is shown to be substantial in table 8, rows 59- 62.
Employment is generated through direct and indirect effects captured by the SAM. As
calculated in the model, the Coca-Cola system system supported about 166,350 full-time
equivalent person years in South Africa in 2003.
As a caveat to the results presented this chapter, it should be stressed that the
economic impacts rest on assumptions about the structure of the South African economy
(like employment-output ratios) that will change over time. The results, moreover,
depended on information from surveys (obtained from the bottlers and the informal
sector) that were not always complete. To fill data gaps, numerous assumptions were
made, mostly based on previous experience with modeling the beverage industrys
economic impact in South Africa.
In sum, this chapter offers a comprehensive view of the Coca-Cola systems
economic effects. A unique aspect of this impact analysis is the attempt to calculate
upstream production impacts (from bottlers) along with downstream linkage effects
stemming from formal and informal trade . Nevertheless, there are some economic
effects that are not captured by this study. For example, on the formal side of retail an
impact that could be considered in future research is the restaurant/catering industry. It
could be argued that this downstream activity warrants a special survey to obtain
accurate information on the income gained from the sale of Coca-Cola products. On the
upstream side, more attention should be given to sugar growing and refining, among
other important suppliers. Thus, despite the comprehensive nature of this analysis, there
remain some aspects of the Coca-Cola system impact that were not included.
References
Thurlow J. (2003): A Standard Dynamic Computable General Equilibrium Model for South
Africa, TIPS Working Paper.
Thurlow, J & van Seventer, DEN, 2002: A standard computable general equilibrium model of
the South African economy, TIPS working paper, IFPRI TDM, Discussion Paper, no: 100,
http://www.ifpri.org/divs/tmd/dp/papers/tmdp100.pdf.
Endnotes
During 1998 Coca-Cola commissioned an analysis of the economic impact of its operations in
South Africa based on a first generation SAM based model. The SAM is updated by Thurlow
(2003) from the earlier SAM by Thurlow & van Seventer (2002).

on South Africa
Chapter 4
Results of the Survey
Introduction
The aim of this chapter is to present detailed results from the survey of South
Africas informal sector. The results of this survey, which covered 760 businesses in
informal retail trade, were used to model the impact presented in the last chapter. In
addition, the answers to the survey reveal many interesting features of the informal
sector of South Africaits economic vitality and viability. The sustainability of the businesses and the role of the Coca-Cola system in informal retail development, major issues
queried in the survey, are explored in this chapter.
The sample frame was developed to capture South Africas mix of informal retail
channelsfrom street hawkers to shebeens. Moreover,, the sample accounts for South
Africas diverse regions and covers all levels of its urban and rural mix from the major
cities to South Africas townships and rural villages. Owners and managers of informal
retail trade outlets were asked to respond to a pre-tested, structured questionnaire,
administered by trained interviewers. The survey instrument included requests for
precise business information, such as employment, turnover, and net income, as well as
demographic characteristics of the small business owners and their employees.
For purposes of this discussion, data have been cross-tabulated by degree of
urbanisation (metropolitan, urban and rural areas) and type of business (spazas,
shebeens, hawkers and otherconsisting of kiosks, take-aways and persons selling
from home).
Characteristics of Business Owners

Job prior to starting the business
Table 1 reflects the response to the question: What was your job before you
started this business? Table 1(A) reflects the results by type of business and Table 1(B)
by degree of urbanisation. More than a third of the respondents (34.5 %) were unem-
* Other cross-tabulation not reported herein may be requested from BMR in South Africa.
Table 1(A)
Job Before Starting This Business By Type of Business
Question 55: What was your job before you started this business?
Spaza/tuck shop
N
%
Shop assistant/
sales person
Office worker
Housewife
Retired
Unemployed
Other
Total
47
14.3
20
6.1
30
9.1
19
5.8
91
27.7
121
36.9
328 100.0
Shebeen
N
%
Type of business
Hawker
N
%
23
13.8
10
6.0
12
7.2
10
6.0
59
35.3
53
31.7
167 100.0
15
10.1
1
0.7
18
12.2
6
4.1
79
53.4
29
19.6
148 100.0
Other
%
15
14.6
10
9.7
15
14.6
8
7.8
28
27.2
27
26.2
103 100.0
Total
N
%
100
13.4
41
5.5
75
10.1
43
5.8
257
34.5
230
30.8
746 100.0
Table 1(B)
Job Before Starting This Business By Urbanisation
Question 55: What was your job before you started this business?
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
Shop assistant/
sales person
Office worker
Housewife
Retired
Unemployed
Other
Total
55
14.2
28
7.2
41
10.6
14
3.6
111
28.6
139
35.8
388 100.0
31
17.4
10
5.6
21
11.8
13
7.3
57
32.0
46
25.8
178 100.0
14
7.8
3
1.7
13
7.2
16
8.9
89
49.4
45
25.0
180 100.0
Total
%
100
13.4
41
5.5
75
10.0
43
5.8
257
34.5
230
30.8
746 100.0
ployed before they started their businesses. Other important activities prior to commencing the business were:
Shop assistant (seller) 13.4 %

Housewife
10.1 %
Retired
5.8 %
More than half (53.4 %) the hawkers were previously unemployed (Table 1(A)),
and this was more so in the rural areas (49.4 % in Table 1(B)).
Career Orientation
Respondents were asked whether they would accept a job in the formal sector if
offered one today. It was reasoned that a negative answer is an indication of the permanency of what they are currently doing. Table 2(A) shows that more than half the reEconomic Impact of The Coca-Cola System on South Africa, 33
Table 2(A)
Acceptance Of A Job In The Formal Sector If Offered Today By Type Of
Business
Question 56: Will you accept a job in the formal sector if offered today?
Yes
No
Total
Spaza/tuck shop Shebeen

N
%
N
%
167
50.6
88
53.0
163
49.4
78
47.0
330 100.0
166 100.0
Hawker
N
%
93
64.6
51
35.4
144 100.0
Other
N
%
58
57.4
43
42.6
101 100.0
Total
N
%
406
54.8
335
45.2
741 100.0
Table 2(B)
Acceptance of a Job in the Formal Sector If Offered Today
by Urbanisation
Question 56: Will you accept a job in the formal sector if offered today?
Yes
No
Total
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
206 54.2
90
50.8
110
59.8
174 45.8
87
49.2
74
40.2
380 100.0
177 100.0 184 100.0
Total
N
%
406
54.8
335
45.2
741 100.0
spondents of spaza shops (50.6 %), shebeens (53.0 %), hawkers (65.6 %) and other
(57.4 %) are not satisfied with what they are doing. Respondents from metropolitan and
urban areas are more satisfied with what they are doing in comparison with those in
rural areas where 59.8 % indicated that they would accept a job in the formal sector
when offered.
Household size
The household size of business owners/managers is depicted in table 3. This
ranges from 4.92 household members in the households of hawkers to 5.59 members in
the households of spaza owners. Rural households (5.46 members) are generally larger
than urban (5.10) and metropolitan households (5.27).
Table 3(A)
Average Household Size
by Type of Business
Table 3(B)
Average Household Size
by Urbanisation
Question 57: How many people, including yourself,

are in your household?
Question 57: How many people, including

yourself, are in your household?
Type of business
Urbanisation
Spaza/tuckshop
Shebeen
Hawker
Other
Total
N
325
164
143
99
731
Mean
%
5.59
4.95
4.92
5.34
5.28
Metropolitan
Urban
Rural
Total
N
382
169
180
731
Mean
%
5.27
5.10
5.46
5.28
Household income, other sources than from the business

Household income, other than business income, earned by any household member is shown in tables 4(A) and 4(B). The number of households who received an income other than business income is shown as 330 or 43.9 % of 751 in table 4. The highest percentage by type of business is for other (47.1 % in table 4(A)) and by degree of
urbanisation for metropolitan area (48.3 % in table 4(B)).
Table 4(A)
Household Members (Including Owner/Manager) Earning an Income
Outside This Business by Type Of Business
Question 58: Do any of your household members (including yourself) earn an income outside this
business?
Yes
No
Total
Spaza/tuck shop
N
%
155
46.4
179
53.6
334 100.0
Type of business
Shebeen
Hawker
N
%
N
%
70
41.9
57
38.5
97
58.1
91
61.5
167 100.0
148 100.0
Other
N
%
48
47.1
54
52.9
102 100.0
Total
N
%
330
43.9
421
56.1
751 100.0
Table 4(B)
Household Members (Including Owner/Manager) Earning
an Income Outside This Business by Urbanisation
Question 58: Do any of your household members (including yourself) earn an
income outside this business?
Yes
No
Total
Metropolitan
No
%
189
48.3
202
51.7
391 100.0
Urbanisation
Urban
Rural
No
%
No
%
77
43.5
64
35.0
100
56.5
119
65.0
177 100.0 183 100.0
Total
No
%
330
43.9
421
56.1
751 100.0
Table 5 shows the distribution of respondents by income group for household

income outside the business by type of business (table 5(A)) and area (table 5 (B)).
Approximately one third (32.8 %) of those who earn an outside income earn 3,000.00
rand or more per month. The percentage of spaza owners/managers who earn 3,000.00
rand or more per month is 38.1 % while 39.1 % of the respondents from metropolitan
areas earn 3,000.00 rand or more per month.
Respondents were asked how many other retail businesses they owned. The
average number owned is as follows:
Type of business
Spaza/tuckshop
Hawker
0.31
0.32
Shebeen
Other
0.31
0.25
Table 5(A)
Distribution of Respondents by Income Group for Income Earned from
All Sources Outside This Business by Type Of Business
Question 58: Do any of your household members (including yourself) earn an income outside this
business?
Spaza/tuck shop
N
%
R1-R299
1
0.7
R300-R799
14
9.5
R800-R899
6
4.1
R900-R999
5
3.4
R1,000-R1,499
24
16.3
R1,500-R1,999
16
10.9
R2,000-R2,999
25
17.0
R3,000-R4,999
26
17.7
R5,000-R9,999
19
12.9
R10,000-R19,999
9
6.1
R20,000-R49,999
2
1.4
Total
147 100.0
Shebeen
N
%
3
4.5
6
9.1
5
7.6
1
1.5
13
19.7
8
12.1
10
15.2
11
16.7
6
9.1
3
4.5
66
100.0
Type of business
Hawker
N
%
4
7.1
11
19.6
4
7.1
5
8.9
5
8.9
6
10.7
9
16.1
7
12.5
3
5.4
2
3.6
56
100.0
Other
N
%
8
1
18.2
2.3
7
4
9
8
5
2
15.9
9.1
20.5
18.2
11.4
4.5
44
100.0
Total
N
%
8
2.6
39
12.5
15
5.1
11
3.5
49
15.7
34
10.9
53
16.9
52
16.6
33
10.5
16
5.1
3
0.6
313
100.0
Table 5(B)
Distribution of Respondents by Income Group for Income Earned
From All Sources Outside This Business by Urbanisation
Question 58: Do any of your household members (including yourself) earn an income
outside this business?
Income group
(monthly)
R1-R299
R300-R799
R800-R899
R900-R999
R1,000-R1,499
R1,500-R1,999
R2,000-R2,999
R3,000-R4,999
R5,000-R9,999
R10,000-R19,999
R20,000-R49,999
Total
Metropolitan
N
%
4
2.3
20
11.3
10
5.6
5
2.8
22
12.4
24
13.6
23
13.0
32
18.1
24
13.6
12
6.8
1
0.6
177 100.0
Urbanisation
Urban
N
%
1
1.3
8
10.7
2
2.7
1
1.3
17
22.7
7
9.3
16
21.3
13
17.3
7
9.3
2
2.7
1
1.3
75
100.0
Rural
N
%
3
4.9
11
18.0
4
6.6
5
8.2
10
16.4
3
4.9
14
23.0
7
11.5
2
3.3
2
3.3
61
Total
N
%
8
2.6
39
12.5
16
5.1
11
3.5
49
15.7
34
10.9
53
16.9
52
16.6
33
10.5
16
5.1
2
0.6
100.0 313
100.0
Degree of urbanisation
Metropolitan
0.25
Rural
0.41
Urban
Total
0.29
0.30
Reason for starting business

Almost half (48.4 %) the respondents indicated that unemployment was the
reason for starting the business (table 6). The next most important reason was to increase income (31.7 %). Two thirds (66.4 %) of all hawkers said unemployment was
their reason for starting their hawking businesses (table 6(A)) while 54.4 % of the respondents in urban areas supplied this reason (table 6(B)).
Level of education
Table 7 shows the distribution of respondents by level of education. The largest
percentage (36.9 %) falls into the secondary grade (grade 8-11) group followed by matric
Table 6(A)
Reason For Starting Business By Type Of Business
Question 59: Reason for starting this business

N
%
N
%
To increase income
125
36.9
55
32.5
Unemployed
143
42.2
80
47.3
Family business
23
6.8
9
5.3
To seize business
opportunity
(entrepreneurship) 18
5.3
10
5.9
To work from home
23
6.8
12
7.1
Other
7
2.1
3
1.8
Total
339 100.0
169 100.0
Type of business
Hawker
N
%
31
20.8
99
66.4
4
2.7
9
3
3
149
6.0
2.0
2.0
100.0
Other
N
%
30
28.8
46
44.2
7
6.7
12
4
5
104
11.5
3.8
4.8
100.0
Total
N
%
241
31.7
368
48.4
43
5.7
49
42
18
761
6.4
5.5
2.4
100.0
Table 6(B)
Reason For Starting Business By Urbanisation
Question 59: Reason for starting this business
Metropolitan
N
%
143
36.4
177
45.0
18
4.6
To increase income
Unemployed
Family business
To seize business opportunity
(entrepreneurship)
24
To work from home
22
Other
9
Total
393
6.1
5.6
2.3
100.0
Urbanisation
Urban
Rural
N
%
N
%
54
29.7
44
23.7
99
54.4
92
49.5
7
3.8
18
9.7
12
6
4
182
6.6
3.3
2.2
100.0
13
14
5
186
7.0
7.5
2.7
100.0
N
241
368
43
Total
%
31.7
48.4
5.7
49
42
18
761
6.4
5.5
2.4
100.0
Table 7(A)
Level Of Education By Type Of Business
Question60: What is your educational level?

N
%
N
%
No formal schooling 26
7.7
12
7.1
Primary (Gr 1-7)
68
20.2
29
17.1
Secondary (Gr 8-11) 124
36.9
67
39.4
Matric (Gr 12)
79
23.5
50
29.4
Tertiary (Post matric) 39
11.6
12
7.1
Total
336 100.0
170 100.0
Type of business
Hawker
Other
N
%
N
%
11
7.4
4
3.8
34
23.0
17
16.3
58
39.2
31
29.8
35
23.6
36
34.6
10
6.8
16
15.4
148 100.0 104 100.0
Total
N
%
53
7.0
148
19.5
280
36.9
200
26.4
77
10.2
758 100.0
Table 7(B)
Level Of Education By Urbanisation
Question60: What is your educational level?
No formal schooling
Primary (Gr 1-7)
Secondary (Gr 8-11)
Matric (Gr 12)
Tertiary (Post matric)
Total
Metropolitan
N
%
N
19
4.8
3
64 16.2
34
165 41.9
63
109 27.7
53
37
9.4
25
394 100.0
178
Urbanisation
Urban
Rural
%
N
%
1.7
31
16.7
19.1
50
26.9
35.4
52
28.0
29.8
38
20.4
14.0
15
8.1
100.0
186 100.0
N
53
148
280
200
77
758
Total
%
7.0
19.5
36.9
26.4
10.2
100.0
(grade 12), with 26.4 %. A relatively high percentage of all respondents (10,2 %) and
even a higher percentage of 15.4 % for other businesses in table 7(A) and 14.0 % for
urban businesses in table 7(B) indicated that they had completed a tertiary level course.
Characteristics of Businesses
Legal status of businesses
Table 8 shows that the vast majority (61.8 %) of the businesses included in the
study are sole proprietors while 32.4 % are family businesses. Family businesses
(46.1 %) in rural areas are almost as important in legal status as sole proprietorship
(table 8(B)).
Years in operation
Table 9 shows the distribution of businesses according to for time in operation.
With more than a third (34.9 %) of all businesses in operation for five years or longer, it
can be assumed that a sizeable proportion of businesses are well established. InterestEconomic Impact of The Coca-Cola System on South Africa, 38
Table 8(A)
Legal Status Of Business By Type Of Business
Question 53: What is the legal status of your business?

N
%
N
%
Sole proprietorship 192
57.5
104
62.3
Partnership
8
2.4
5
3.0
Family business
127
38.0
56
33.5
Close corporation
3
0.9
2
1.2
Cooperative
1
0.3
Other
3
0.9
Total
334 100.0
167 100.0
Type of business
Hawker
N
%
108
74.5
5
3.4
28
19.3
1
3
145
0.7
2.1
100.0
Other
Total
N
%
N
%
58
57.4 462
61.8
4
4.0
22
2.9
31
30.7 242
32.4
4
4.0
9
1.2
1
1.0
3
0.4
3
3.0
9
1.2
101 100.0 747 100.0
Table 8(B)
Legal Status Of Business By Urbanisation
Question 53: What is the legal status of your business?
Sole proprietorship
Partnership
Family business
Close corporation
Cooperative
Other
Metropolitan
N
%
252
64.9
10
2.6
116
29.9
5
1.3
5
1.3
Urbanisation
Urban
Rural
N
%
N
%
125
69.8
85
47.2
7
3.9
5
2.8
43
24.0
83
46.1
1
0.6
3
1.7
3
1.7
3
1.7
1
0.6
Total
N
%
462
61.8
22
2.9
242
32.4
9
1.2
3
0.4
9
1.2
Table 9(A)
Distribution of Business by Time in Operation and Type of Business
Question 4: How long has this business been in operation?

N
%
N
%
Less than 6 months
30
8.8
11
6.5
> 6 months & < 1 year
41
12.1
19
11.3
> 1 year & < 2 years
39
11.5
27
16.1
> 2 years & < 3 years
51
15.0
17
10.1
> 3 years % < 5 years
55
16.2
25
14.9
39
11.5
21
12.5
> 7 years
85
25.0
48
28.6
Total
340 100.0 168 100.0
Type of business
Hawker
Other
N
%
N
%
18
12.1
13
12.6
18
12.1
13
12.6
23
15.4
15
14.6
20
13.4
17
16.5
22
14.8
21
20.4
12
8.1
6
5.8
36
24.2
18
17.5
149 100.0 103 100.0
N
72
91
104
105
123
78
187
760
Total
%
9.5
12.0
13.7
13.8
16.2
10.3
24.6
100.0
Table 9(B)
Distribution of Business by Time in Operation and Urbanisation
Question 4: How long has this business been in operation?
Less than 6 months

> 6 months & < 1 year
> 1 year & < 2 years
> 3 years % < 5 years
> 7 years
Total
Metropolitan
N
%
39
9.9
31
7.9
48
12.2
55
14.0
63
16.0
35
8.9
123
31.2
394
100.0
Urbanisation
Urban
Rural
N
%
N
%
13
7.2
20
10.8
28
15.5
32
17.3
24
13.3
32
17.3
26
14.4
24
13.0
36
19.9
24
13.0
20
11.0
23
12.4
34
18.8
30
16.2
181 100.0 185 100.0
Total
N
%
72
9.5
91
12.0
104
13.7
105
13.8
123
16.2
78
10.3
187
24.6
760 100.0
ingly, it was found that small businesses show a relatively high attrition rate. In addition, a number of businesses in the survey are fairly young, (9.5 % have been in operation for less than six months and 12.0 % for six months and longer but less than one
year).
The age of businesses according to type of business (table 9(A)), shows that
shebeens have been in operation for a longer period than the other types (41.1 % for 5
years or longer) while the opposite is true for other.
Type of products sold
Table 10 shows the main types of goods sold by type of businesses (10(A) and
degree of urbanisation 10(B)). The most diversified of all business types are spazas.
More than three quarters (76.5 %) engage in selling beverages as well as food and nonfood products. As could be expected, shebeens are primarily involved in the beverage
Table 10(A)
Categories of Products Sold by Type of Business
Question 5: What category of products do you sell?

N
%
N
%
Food products including
beverages
69
20.3
14
8.2
Food products only
5
1.5
1
0.6
Non-food products
1
0.3
Food including beverages & non-food
products
260
76.5
67
39.4
Beverages only
2
0.6
79
46.5
Other
3
0.9
9
5.3
Total
340 100.0 170
100.0
Type of business
Hawker
N
%
Other
%
Total
N
41
8
27.5
5.4
39
3
37.5
2.9
163
17
1
21.4
2.2
0.1
74
20
6
149
49.7
13.4
4.0
100.0
40
21
1
104
38.5
20.2
1.0
100.0
441
122
19
763
57.8
16.0
2.5
100.0
Table 10(B)
Categories of Products Sold by Urbanisation
Question 5: What category of products do you sell
Urbanisation
Metropolitan
Urban
N
%
N
%
Rural
N
Total
N
Food products including

beverages
Food products only
Non-food products
Food including beverages
& non-food products
Beverages only
Other
84
7
1
21.3
1.8
0.3
39
1
21.4
0.5
40
9
21.5
4.8
163
17
1
21.4
2.2
0.1
222
72
9
56.2
18.2
2.3
107
31
4
58.8
17.0
2.2
112
19
6
60.2
10.2
3.2
441
122
19
57.8
16.0
2.5
Total
395
100.0
182
100.0 186
100.0
763
100.0
Table 11
Ranking of Product Sales in Order of Contribution to
the Turnover of Spazas/Tuckshops
Question 6: Indicate the five most important products to your business in terms of monthly
turnover (sales) or rank them in order of importance if turnover cannot be provided.
Product
Ranking of sales
Soft drinks (eg Coca Cola)

Bread
Cigarettes/tobacco
Paraffin/candles
Milk
Maize meal
Sweets and chocolates
Groceries
Sugar
Alcoholic beverages
Meat
Eggs
Fruit & Vegetables
Soap
Fish
Total
1
97
110
25
12
3
25
8
16
4
27
6
1
2
2
1
339
2
97
51
50
22
24
7
8
14
20
10
9
3
4
4
1
324
3
53
41
72
13
21
18
17
16
20
8
3
9
10
5
2
308
4
32
30
39
32
30
11
33
12
15
2
8
15
11
7
13
290
Index
Index
value ranking
5
28
22
21
25
26
15
44
15
30
3
4
20
6
7
1
267
1 124
959
640
276
260
244
233
223
220
206
95
94
84
62
42
4,762
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
trade. However, it should be kept in mind that, due to the screening question, businesses not engaged in the selling of soft drinks are excluded from the survey. Tables 11
to 14 show the specific products that contribute mostly to the turnover of the businesses.
Respondents were asked to give the actual turnover for each product listed in question 6
but very few were willing to do so. Therefore only the rankings, together with an index,
are shown in tables 11 to 14, one table for each type of business. The index is calculated
by giving a value of 5 to the first-ranked product, a 4 to the second, a 3 to the third, a 2 to
Table 12
the Turnover of Shebeens
Product
Ranking of sales
Alcoholic beverages
Cigarettes/tobacco
Bread
Paraffin/candles
Groceries
Maize meal
Milk
Sugar
Total
1
110
30
7
8
0
2
0
0
0
0
157
2
20
83
30
3
2
1
4
0
0
0
143
3
6
30
51
9
3
4
1
3
0
2
109
4
5
5
10
9
9
3
2
1
2
2
48
5
0
2
3
5
13
3
4
2
8
0
40
Index
Value
Index
ranking
658
584
331
102
48
35
27
13
12
10
1,820
1
2
3
4
5
6
7
8
9
10
Table 13
the Turnover of Hawkers
Product
Ranking of sales

Cigarettes/tobacco
Fruit & Vegetables
Bread
Meat
Milk
Alcoholic beverages
Groceries
Fish
Soap
Total
1
82
15
4
17
4
3
0
3
2
0
0
130
2
34
30
23
14
6
6
2
2
0
2
0
119
3
14
28
30
19
5
1
4
0
0
1
0
102
4
6
10
13
11
8
0
2
0
3
0
0
53
Index
Value
5
2
6
10
1
2
1
1
0
1
3
2
29
602
305
238
221
77
43
25
23
17
14
2
1,567
Index
ranking
1
2
3
4
5
6
7
8
9
10
11
Table 14
the Turnover of Other Businesses
Product
Ranking of sales
Soft drinks (e.g., Coca-Cola)

Other
Bread
Alcoholic beverages
Fruit & Vegetables
Groceries
Maize meal
Fish
Milk
Eggs
Sugar
Soap
Total
1
46
17
3
2
4
0
3
3
1
0
0
0
0
79
2
29
5
8
9
4
7
1
1
1
0
0
0
0
65
3
11
4
9
8
1
1
3
3
3
1
3
0
0
47
4
4
3
9
1
2
3
3
1
2
5
2
1
1
37
Index
Value
5
3
0
5
3
1
2
0
3
1
4
1
3
0
26
390
123
97
75
44
39
34
33
23
17
14
5
2
896
Index
ranking
1
2
3
4
5
6
7
8
9
10
11
12
13
the fourth and a 1 to the fifth rank. The index ranking in the tables represents the order
of index values.
Table 11 shows that 110 spazas said bread contributes most to their turnover,
while softdrinks were mentioned by 97. However, 97 of the spazas indicated that
softdrinks are the second most important contributor to their turnover while only 51
indicated that bread is second on their list. The calculated index value for softdrinks
tops the list in table 11. Without actual sales values it can be stated that softdrinks contribute, if not the most, a very important share in the turnover of spazas. Alcoholic
beverages, as expected, are the main contributor to the turnover of shebeens, followed by
softdrinks (table 12). Softdrinks also top the list for hawkers (table 13) and other businesses (table 14). However, it must be remembered that a screening question excluded
businesses not selling softdrinks.
Business hours
Table 15 shows the distribution of all businesses according to the number of hours
open by weekday. Approximately a quarter of the businesses are open from 1 to 8 hours
(25.3 %) and from 11 to 12 hours (25.4 %) on Mondays. A similar pattern is shown for
Tuesdays, Wednesdays and Thursdays. Table 15 shows that businesses tend to be open
for longer on Fridays and Saturdays. Although 122 or 16.7 % of the respondents indicated that they do not do business on Sundays, a substantial number (63.6 %) do business for longer than 8 hours on Sundays.
Table 15
Distribution of Businesses by Weekday and Number of Hours Open
Question 61: Indicate number of hours open each day of the week:
Weekday
Hours open
None 1-8
%
0.9
0.8
0.5
0.7
0.4
5.1
16.7
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday
%
25.3
24.9
25.1
25.0
22.3
20.9
19.7
9-10 11-12 13-14 15-16 17-18 18+ Total

%
18.1
18.0
17.8
17.6
18.4
17.3
15.6
%
25.4
25.9
26.2
26.3
22.6
19.5
18.5
%
17.2
17.1
17.1
17.0
17.0
17.6
15.5
%
11.1
11.3
11.1
11.2
13.6
13.4
10.7
%
1.8
1.8
1.8
1.9
3.5
4.0
2.3
%
0.3
0.3
0.3
0.4
2.2
2.3
1.0
%
N
100.0 740
100.0 735
100.0 736
100.0 735
100.0 735
100.0 729
100.0 730
Table 16
Highest Percentage for Trading Hours by
Weekday and Type of Business
Weekday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday
hours
%
hours
%
hours
%
hours
%
hours
%
hours
%
hours
%
Spaza
11 - 12
25.0
11 - 12
25.5
11 - 12
25.8
11 - 12
26.4
11 - 12
24.3
13 - 14
23.0
11 - 12
22.0
Shebeen
11 - 12
32.9
11 - 12
3.3
11 - 12
34.3
11 - 12
33.3
13 - 14
22.3
13 - 14
21.3
11 - 12
23.5
Type of business
Hawker
Other
1-8
1-8
36.6
31.0
1-8
1-8
36.1
30.0
1-8
1-8
36.8
31.0
1-8
1-8
36.1
31.0
1-8
1-8
35.4
32.0
1-8
1-8
33.8
27.6
Not open
Not open
46.2
30.2
Table 16 gives a summary of the highest percentage of trading hours by weekday

and type of business. The table shows that spazas and shebeens generally do business
for longer hours than hawkers and other. Table 17 provides information similar to that
in table 16 but by degree of urbanisation. In general, it seems that businesses do business for longer hours in metropolitan and rural areas.
Role of Coca-Cola
Affordability
Respondents were asked to indicate, on a five-point scale, whether they strongly
disagreed at the one end of the scale or strongly agree at the other end with the stateEconomic Impact of The Coca-Cola System on South Africa, 44
Table 17
Highest Percentage for Trading Hours by Weekday and
Urbanisation
Weekday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday
hours
%
hours
%
hours
%
hours
%
hours
%
hours
%
hours
%
Urbanisation
Metropolitan
Urban
Rural
11 - 12
1-8
11 - 12
23.2
32.9
33.9
11 - 12
1-8
11 - 12
23.6
37.3
34.7
11 - 12
1-8
11 - 12
23.8
34.3
35.2
11 - 12
1-8
11 - 12
23.6
37.3
36.4
11 - 12
1-8
11 - 12
20.9
30.1
27.8
13 - 14
1-8
1-8
19.0
24.3
24.3
Not open & 11 - 12 1 - 8
1 - 8 & 11 - 12
16.8
25.4
22.5
Table 17(A)
Coca-Cola Products Are Affordable by Type of Business
Question 7: To what extent do you agree/disagreeCoca-Cola Products are Affordable
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
Total
Spaza/tuck shop
Shebeen
N
%
N
%
15
4.5
9
5.4
17
5.0
8
4.8
39
11.6
23
13.7
154 45.7
73
43.5
112 33.2
55
32.7
337 100.0 168 100.0
Type of business
Hawker
Other
N
%
N
%
9
6.1
6
5.8
8
5.4
5
4.8
19
12.9
10
9.6
55
37.4
49
47.1
56
38.1
34
32.7
147 100.0 104 100.0
N
39
38
91
331
257
756
Total
%
5.2
5.0
12.0
43.8
34.0
100.0
ment Coca-Cola products are affordable. The response to this statement is shown in
table 17(A) by type of business and in table 17(B) by degree of urbanisation.
By far the majority of owners/managers of all types of businesses agree or
strongly agree with the statement that Coca-Cola is affordable. This positive opinion is
also reported in metropolitan, urban and rural areas. In total, only 10,2 % of the respondents disagree or strongly disagree with the statement while 77.8 % agree or strongly
agree that Coca-Cola products are affordable.
Table 17(B)
Coca-Cola Products Are Affordable by Urbanisation
Question 7: To what extent do you agree/disagreeCoca-Cola Products are Affordable
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
Total
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
23
5.9
12
6.7
4
2.2
39
5.2
27
6.9
5
2.8
6
3.2
38
5.0
40
10.2
24
13.4
27
14.6
91
12.0
180
45.9
71
39.7
80
43.2 331
43.8
122
31.1
67
37.4
68
36.8 257
34.0
392 100.0 179
100.0 185
100.0 756 100.0
Coca-Cola products attract customers

Almost eighty percent (79.4 %) of the respondents agree or strongly agree with
the statement that Coca-Cola products attract people to their businesses. A high percentage of respondents from all type of businesses (table 18(A)) and those in metropolitan, urban and rural areas (table 18(B)) held this opinion. Tables 19(A) and 19(B) show
that Coca-Cola products do not only attract people to their businesses but, according to
the vast majority of respondents, stimulate the sales of their other products. A total of
81.6 % of all respondents agree (43.6 %) or strongly agree (38.0 %) with this statement
and this positive opinion is held by respondents of all types of areas.
Frequency of purchases
Tables 20(A) and 20(B) indicate how often Coca-Cola products are bought. The
majority of owners buy Coca-Cola stock on a weekly basis (63.6 %), followed by daily
purchases (24.4 %). All business types, with the exception of hawkers, favour weekly
purchases. Just more than half (53.1 %) the hawkers/street vendors replenish stock on a
daily basis. The frequency of purchases does not differ significantly by area (table
20(B)).
Table 18(A)
Coca-Cola Products Attract People to Store by Type of Business
Question 7: To what extent do you agree/disagreeCoca-Cola Products Attract People to Store
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
Total
Type of business
Hawker
Other
N
%
N
%
N
%
N
%
13
3.9
5
3.0
4
2.7
4
3.9
12
3.6
5
3.0
2
1.9
46
13.6
30
17.9
21
14.2
14
13.6
143
42.4
72
42.9
74
50.0
46
44.7
123
36.5
56
33.3
49
33.1
37
35.9
337
100.0 168 100.0 148 100.0 103 100.0
Total
N
%
26
3.4
19
2.5
111
14.7
335
44.3
265
35.1
756 100.0
Table 18(B)
Coca-Cola Products Attract People to Store by Urbanisation
Question 7: To what extent do you agree/disagreeCoca-Cola Products Attract People to Store
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
13
3.3
12
6.7
1
0.5
12
3.1
4
2.2
3
1.6
52
13.3
24
13.4
35
18.9
180
45.9
62
34.6
93
50.3
135
34.4
77
43.0
53
28.6
392 100.0 179 100.0 185 100.0
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
Total
Total
N
%
26
3.4
19
2.5
111
14.7
335
44.3
265
35.1
756 100.0
Table 19(A)
When Buyers Purchase Coca-Cola Products. They Also Buy Other Goods
by Type of Business
Question 7: To what extent do you agree/disagreeWhen Buyers Purchase Coca-Cola Products, They
Also Buy Other Goods
Type of business
Hawker
Other
Total
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
Total
N
10
7
29
152
136
334
%
N
3.0
3
2.1
8
8.7
27
45.5
69
40.7
61
100.0 168
%
1.8
4.8
16.1
41.1
36.3
100.0
N
8
2
17
65
51
143
%
5.6
1.4
11.9
45.5
35.7
100.0
N
6
4
16
40
36
102
%
5.9
3.9
15.7
39.2
35.3
100.0
N
27
21
89
326
284
747
%
3.6
2.8
11.9
43.6
38.0
100.0
Table 19(B)
When Buyers Purchase Coca-Cola Products. They Also Buy Other Goods
by Urbanisation
Question 7: To what extent do you agree/disagreeWhen Buyers Purchase Coca-Cola Products,
They Also Buy Other Goods
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
Total
Metropolitan
N
%
7
1.8
13
3.4
39
10.1
185
47.9
142
36.8
386 100.0
Urbanisation
Urban
Rural
N
%
N
%
17
9.6
3
1.6
4
2.3
4
2.2
20
11.3
30
16.3
71
40.1
70
38.0
65
36.7
77
41.8
177 100.0 184 100.0
Total
N
%
27
3.6
21
2.8
89
11.9
326
43.6
284
38.0
747 100.0
Table 20(A)
Frequency of Purchase of Coca-Cola Products by Type of Business
Question 8: How often do you purchase Coca-Cola products?
Frequency
N
%
N
%
Daily
48
14.2
29
17.2
Weekly
249
73.7 120
71.0
Monthly
25
7.4
13
7.7
Not on a regular basis
16
4.7
7
4.1
Total
338 100.0 169
100.0
Type of business
Hawker
Other
Total
N
%
N
%
N
%
78
53.1
30
28.8 185
24.4
51
34.7
62
59.6 482
63.6
6
4.1
6
5.8
50
6.6
12
8.2
6
5.8
41
5.4
147 100.0 104
100.0 758 100.0
Table 20(B)
Frequency of Purchase of Coca-Cola Products by Urbanisation
Question 8: How often do you purchase Coca-Cola products?
Frequency
Daily
Weekly
Monthly
Total
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
112
28.4
32
17.8
41
22.3
242
61.4
124
68.9
116
63.0
23
5.8
11
6.1
16
8.7
17
4.3
13
7.2
11
6.0
394 100.0 180 100.0 184 100.0
Total
N
%
185
24.4
482
63.6
50
6.6
41
5.4
758 100.0
Frequency of Coca-Cola truck deliveries

The frequency of the Coca-Cola system truck deliveries is shown by type of business is shown in table 21(A) and by degree of urbanisation in table 21(B). Two thirds
(66.8 %) of all respondents indicated that deliveries are made once a week. The percentages for spazas (72.6 %) and shebeens (72.1 %) exceed 70 % while a relatively high percentage (28.6 %) of the hawkers receive daily deliveries by a Coca-Cola truck. The deliveries by area (table 21(B)) show a higher percentage for deliveries once a week in urban
(73.0 %) areas when compared with metropolitan (64.6 %) and rural (64.9 %) areas.
The number of respondents who answered this question is considerably lower
than the number included in the sample, indicating that the balance do not receive
deliveries. Percentages for those who receive deliveries are as follows:
Type of business
Spazas/tuckshops
Hawkers
42.9 %
18.8 %
Metropolitan
36.5 %
Rural
19.9 %
Shebeens
Other
35.3 %
26.0 %
Urban
34.6 %
Table 21(A)
Frequency of Coca-Cola Truck Delivers by Type of Business
Question 9: How and how often do you get your Coca-Cola products?
Frequency
Daily
Every other day
Once a week
Once a month
Twice a month
Other
Total

N
%
N
%
5
3.4
4
9.3
4
2.7
2
4.7
106
72.6
31
72.1
9
6.2
3
7.0
12
8.2
1
2.3
10
6.8
2
4.7
146
100.0 43
100.0
Type of business
Hawker
Other
Total
N
%
N
%
N
%
8
28.6
5
18.5
22
9.0
3
10.7
2
7.4
11
4.5
10
35.7
16
59.3 163
66.8
3
10.7
2
7.4
17
7.0
3
10.7
2
7.4
18
7.4
1
3.6
13
5.3
28
100.0 27
100.0 244
100.0
Table 21(B)
Frequency of Coca-Cola Truck Delivers by Urbanisation
Frequency
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
14
9.7
4
6.3
4
10.8
22
9.0
6
4.2
3
4.8
2
5.4
11
4.5
93
64.6
46
73.0
24
64.9 163
66.8
7
4.9
7
11.1
3
8.1
17
7.0
13
9.0
2
3.2
3
8.1
18
7.4
11
7.6
1
1.6
1
2.7
13
5.3
144
100.0 63 100.0 37
100.0 244
100.0
Daily
Every other day
Once a week
Once a month
Twice a month
Other
Total
Frequency of deliveries by wholesalers

Tables 22(A) and (B) show information similar to that in tables 21(A) and (B) but
for deliveries by wholesalers. Forty seven or 60.3 % of respondents who receive
deliveries from a wholesaler said they receive deliveries once a week. The percentages of
respondents who receive deliveries by wholesalers are as follows:
Type of business
Spazas/tuckshops
Hawkers
15.0 %
5.4 %
Metropolitan
9.1 %
Rural
9.1 %
Shebeens
Other
Urban
8.8 %
3.8 %
13.7 %
Table 22(A)
Frequency of Deliveries by Wholesaler and Type of Business
Frequency
Daily
Every other day
Once a week
Once a month
Twice a month
Other
Total
Spaza/tuck shop
N
%
4
7.8
3
5.9
36
70.6
2
3.9
4
7.8
2
3.9
51
100.0
Shebeen
N
%
4
26.7
1
6.7
7
46.7
1
6.7
1
6.7
1
6.7
15
100.0
Type of business
Hawker
Other
N
%
N
%
4
50.0
2
25.0
2
50.0
2
25.0
2
50.0
100.0
100.0
N
12
8
47
3
5
3
78
Total
%
15.4
10.3
60.3
3.8
6.4
3.8
100.0
Table 22(B)
Frequency of Deliveries by Wholesaler and Urbanisation
Frequency
Metropolitan
N
%
7
19.4
3
8.3
22
61.1
1
2.8
3
8.3
Daily
Every other day
Once a week
Once a month
Twice a month
Other
Total
36
100.0
Urbanisation
Urban
Rural
N
%
N
%
2
8.0
3
17.6
5
20.0
15
60.0
10
58.8
2
11.8
1
4.0
1
5.9
2
8.0
1
5.9
25
100.0
17
100.0
Total
N
%
12
15.4
8
10.3
47
60.3
3
3.8
5
6.4
3
3.8
78 100.0
Frequency of fetching from wholesaler

Tables 23(A) and (B) show the frequency of fetching Coca-cola products from
wholesalers. The frequency of fetching is far higher than the frequency of deliveries by
wholesalers (section 2.4.5). Although fetching from wholesalers on a weekly basis is the
most popular practice (55.0 %), the percentage for daily fetching is 23.8 % as against
15.4 % for daily deliveries (table 22). The percentages of respondents who fetch
Coca-Cola products from wholesalers are as follows:
Type of business
Spazas/tuckshops
Hawkers
40.0 %
47.0 %
Metropolitan
43.3 %
Rural
40.3 %
Shebeens
Other
37.1 %
40.4 %
Urban
35.7 %
Table 23(A)
Frequency of Fetching from a Wholesaler by Type of Business
Frequency
Daily
Every other day
Once a week
Once a month
Twice a month
Other
Total
Type of business
Spaza/tuck shop
Shebeen
Hawker
Other
N
%
N
%
N
%
N
%
13
9.6
13
20.6
37
52.9
11
26.2
14
10.3
3
4.8
4
5.7
4
9.5
89
65.4
41
65.1
18
25.7
23
54.8
6
4.4
1
1.6
5
7.1
2
4.8
8
5.9
2
3.2
2
2.9
6
4.4
3
4.8
4
5.7
2
4.8
136
100.0
63
100.0 70
100.0 42
100.0
N
74
25
171
14
12
15
311
Total
%
23.8
8.0
55.0
4.5
3.9
4.8
100.0
Table 23(B)
Frequency of Fetching from a Wholesaler by Urbanisation
Frequency
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
49
28.7
12
18.5
13
17.3
11
6.4
6
9.2
8
10.7
91
53.2
35
53.8
45
60.0
4
2.3
6
9.2
4
5.3
9
5.3
2
3.1
1
1.3
7
4.1
4
6.2
4
5.3
171 100.0 65
100.0
75
100.0
Daily
Every other day
Once a week
Once a month
Twice a month
Other
Total
Total
N
%
74
23.8
25
8.0
171
55.0
14
4.5
12
3.9
15
4.8
311 100.0
Frequency of fetching from retailer

The frequency of fetching from retailers by respondents is shown in tables 24(A)
and (B). The percentages for the frequency of fetching from retailers in tables 24(A) and
(B) do not differ significantly from the percentages for fetching from wholesalers (tables
23(A) and (B)). The percentages of respondents who fetch Coca-Cola products from
retailers are as follows:
Type of business
Spazas/tuckshops
Hawker
27.9 %
44.3 %
Metropolitan
26.1 %
Rural
51.1 %
Shebeens
Other
34.7 %
35.6 %
Urban
32.4 %
Table 24(A)
Frequency of Fetching from a Retailer by Type of Business
Frequency
Daily
Every other day
Once a week
Once a month
Twice a month
Other
Total
Spaza/tuck shop
N
%
8
8.4
10
10.5
52
54.7
11
11.6
8
8.4
6
6.3
95 100.0
Type of business
Shebeen
Hawker
Other
N
%
N
%
N
%
6
10.2
32
48.5
8
21.6
4
6.8
4
6.1
35
59.3
17
25.8
23
62.2
8
13.6
4
6.1
3
8.1
3
5.1
3
4.5
2
5.4
3
5.1
6
9.1
1
2.7
59 100.0
66 100.0
37
100.0
Total
N
%
54
21.0
18
7.0
127
49.4
26
10.1
16
6.2
16
6.2
257 100.0
Table 24(B)
Frequency of Fetching from a Retailer by Urbanisation
Frequency
Daily
Every other day
Once a week
Once a month
Twice a month
Other
Total
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
31
30.1
11
18.6
12
12.6
9
8.7
1
1.7
8
8.4
46
44.7
31
52.5
50
52.6
4
3.9
6
10.2
16
16.8
5
4.9
5
8.5
6
6.3
8
7.8
5
8.5
3
3.2
103 100.0
59 100.0
95 100.0
Total
N
%
54
21.0
18
7.0
127
49.4
26
10.1
16
6.2
16
6.2
257 100.0
Relatively high percentages of respondents indicated that they fetch Coca-Cola

products from retailers for re-sale to their own customers. This is especially the case for
rural areas (51.1 %).
Restocking of Coca-Cola products
Tables 25 through 28 reflect the answers of respondents to the question: What
do you do when you run out of Coca-Cola products (stock)? According to the number of
respondents who answered this question it is clear that the majority of businesses have
experienced a shortage of stock at some time or other. To replenish stock, 89.1 %
indicated that they fetch additional stock from the wholesaler/retailer (table 26). Only a
small percentage (13.8 %) wait for the next delivery of Coca-Cola products (table 25).
The average number of cases fetched by those that replenish stock amounted to
6.95cases (table 27). Less than half (45.4 %) the businesses fetched the additional stock
using their own transport, a further 19.0 % rented a bakkie while 15.1 % used a
wheelbarrow and 13.4 % walked to fetch stock and carried the cases back to the shop
(table 28).
Table 25(A)
Wait for Next Delivery When Running Out of Stock by Type of Business
Question 10: What do you do when you run out of Coca-Cola products (stocks)?
Yes
No
Total
Spaza/tuck shop
N
%
54
17.4
257
82.6
311 100.0
Type of business
Shebeen
Hawker
Other
Total
N
%
N
%
N
%
N
%
18
11.7
11
7.9
13
14.0
96
13.8
136
88.3
129
92.1
80
86.0 602
86.2
154 100.0 140
100.0
93 100.0 698 100.0
Table 25(B)
Wait for Next Delivery When Running Out of Stock by Urbanisation
Yes
No
Total
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
52
14.7
29
16.5
15
8.9
301
85.3
147
83.5
154
91.1
353
100.0 176 100.0 169 100.0
Total
N
%
96
13.8
602
86.2
698 100.0
Table 26(A)
Fetch Stocks from the Wholesaler/Retailer When Running Out of Stock
by Type of Business
Yes
No
Total

N
%
N
%
287
87.0
144
87.3
43
13.0
21
12.7
330
100.0 165 100.0
Type of business
Hawker
Other
N
%
N
%
142
96.6
87
87.9
5
3.4
12
12.1
147 100.0
99 100.0
Total
N
%
660
89.1
81
10.9
741 100.0
Table 26(B)
Fetch Stocks from the Wholesaler/Retailer When Running Out of Stock
by Urbanisation
Yes
No
Total
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
338
88.5
154
87.5 168
91.8 660
89.1
44
11.5
22
12.5
15
8.2
81
10.9
382 100.0 176 100.0 183 100.0 741
100.0
Table 27(A)
Average Number of Cases Fetched
When Run Out of Stock by Type of
Business
Question 10: What do you do when you run out of
Coca-Cola products (stocks)?
Type of business
Spaza/tuckshop
Shebeen
Hawker
Other
Total
N
246
119
110
67
542
Average number
of cases
7.57
7.25
5.11
7.12
6.95
Table 27(B)
Average Number of Cases Fetched
When Run Out of Stock by
Urbanisation
Question 10: What do you do when you run out
of Coca-Cola products (stocks)?
Type of business
Metropolitan
Urban
Rural
Total
N
273
121
148
542
Average number
of cases
7.42
7.05
5.99
6.95
Table 28(A)
Method of Transport for Fetching of Coca-Cola Products by Type of
Business
Walk and carry

Wheelbarrow
Rent a bakkie
Own transport
Other
Total
Type of business
Hawker
N
%
N
%
N
%
9
3.1
8
5.6
60
42.3
37
12.8
19
13.3
25
17.6
66
22.8
32
22.4
17
12.0
156
53.8
78
54.5
27
19.0
22
7.6
6
4.2
13
9.2
290 100.0 143 100.0 142 100.0
Other
N
%
13
13.7
20
21.1
12
12.6
43
45.3
7
7.4
95 100.0
Total
N
%
90
13.4
101
15.1
127
19.0
304
45.4
48
7.2
670 100.0
Table 28(B)
Method of Transport for Fetching of Coca-Cola Products by
Urbanisation
Walk and carry

Wheelbarrow
Rent a bakkie
Own transport
Other
Total
Metropolitan
N
%
63
18.4
31
9.0
41
12.0
182
53.1
26
7.6
343 100.0
Urbanisation
Urban
Rural
N
%
N
%
7
4.6
20
11.4
30
19.7
40
22.9
31
20.4
55
31.4
69
45.4
53
30.3
15
9.9
7
4.0
152 100.0 175 100.0
N
90
101
127
304
48
670
Total
%
13.4
15.1
19.0
45.4
7.2
100.0
Temporary closure of business due to Coca-Cola stock shortages

Tables 29(A) and (B) show the responses to Did you have to close your shop
temporarily during the past 12 months due to the unavailability of Coca-Cola products?
There were indeed 43 or 5.9 % of the 726 respondents who answered this question in the
affirmative. The highest percentage was for other businesses (9.4 %) and the lowest for
spazas (3.7 %) (table 29(A)). Temporary closure occurred more frequently in urban
(10.1 %) than in metropolitan (4.1 %) and rural (5.6 %) areas (table 29(B)).
Table 29(A)
Temporary Closure of Business Because Coca-Cola Products Were Not
Available by Type of Business
Question 62: Did you have to close your shop temporarily during the past 12 months because Coca-Cola
products were not available?
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
12
3.7
10
6.2
12
8.5
9
9.4
43
5.9
315
96.3
151
93.8
130
91.5
87
90.6 683
94.1
327 100.0 161 100.0 142 100.0 96
100.0 726 100.0
Yes
No
Total
Table 29(B)
Temporary Closure of Business Because Coca-Cola Products
Were Not Available by Urbanisation
Question 62: Did you have to close your shop temporarily during the past 12 months because
Coca-Cola products were not available?
Yes
No
Total
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
15
4.1
18
10.1
10
5.6
353
95.9
161
89.9 169
94.4
368
100.0 179 100.0 179 100.0
Total
N
%
43
5.9
683
94.1
726 100.0
Consumption of Coca-Cola products: Location of consumption

Tables 30(A) and 30(B) show where Coca-Cola products are consumed by type of
business and area. Two alternatives were provided, namely: drink in or near the outlet
or at home. Substantial variations occur by type of business. For example, 67.8 % of
hawkers reported that clients tend to consume the product in or near the outlet while
85.5 % of the spazas reported that customers normally consume the product at home.
Table 30(A)
Location of Consumption of Coca-Cola Products by Type of Business
Question 11: When people buy Coca-cola products, where do they drink the product?
Type of business
Hawker
Other
N
%
N
%
N
%
N
%
In or near the outlet
49
14.5
74
44.3
101
67.8
52
51.5
At home
289
85.5
93
55.7
48
32.2
49
48.5
Total
338 100.0 167 100.0 149 100.0 101
100.0
Total
N
%
276
36.6
479
63.4
755 100.0
Table 30(B)
Location of Consumption of Coca-Cola Products by Urbanisation
Question 11: When people buy Coca-cola products, where do they drink the product?
Yes
No
Total
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
161
41.1
65
36.1
50
27.3
231
58.9
115
63.9
133
72.7
392 100.0 180 100.0 183 100.0
Total
N
%
276
36.6
479
63.4
755 100.0
Physical Characteristics of Business

In this section attention will be given to location, equipment, appearance and
facilities of the businesses involved in the study since these factors influence trading.
Location of business
Table 31(A) shows the location of the businesses included in the study by type of
business while table 31(B) reflects location by degree of urbanisation. Spazas (56.5 %),
shebeens (61.3 %) and other businesses (45.6 %) mainly are located in formal residential
areas whereas hawkers (42.2 %) operate mainly near taxi ranks or train stations (table
31(A)). As can be expected, 37.1 % of the businesses in small towns and villages in the
rural areas operate in a rural environment (table 31(B)).
Equipment installed in business
Table 32 shows the percentage of businesses according to the availability of
equipment usually associated with the running of a business. the Coca-Cola system
supplies some of the businesses with refrigerators and/or deep-freezers. The percentages of those supplied by the Coca-Cola system of all respondents with refrigerators and
deep-freezers are shown in table 33.
Table 31(A)
Location of Business by Type of Business
Question 12: State location of your business
Type of business
Spaza/tuck shop
Shebeen
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
Formal residential area 192
56.5 103
61.3
16
10.9
47
45.6 358
47.2
Informal residential area 73
21.5
32
19.0
11
7.5
10
9.7 126
16.6
Hostel
5
1.5
6
3.6
21
14.3
12
11.7
44
5.8
Rural area
56
16.5
23
13.7
8
5.4
12
11.7
99
13.1
Taxi rank/train station
5
1.5
3
1.8
62
42.2
13
12.6
83
10.9
Other
9
2.6
1
0.6
29
19.7
9
8.7
48
6.3
Total
340
100.0 168 100.0 147 100.0 103
100.0 758
100.0
Table 31(B)
Location of Business by Urbanisation
Question 12: State location of your business
Formal residential area

Informal residential area
Hostel
Rural area
Other
Total
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
208
53.1
95
52.8
55
29.6 358
47.2
67
17.1
25
13.9
34
18.3 126
16.6
33
8.4
9
5.0
2
1.1
44
5.8
2
0.5
28
15.6
69
37.0
99
13.1
55
14.0
11
6.1
17
9.1
83
10.9
27
6.9
12
6.7
9
4.8
48
6.3
392
100.0 180
100.0 183
100.0 755
100.0
Table 32(A)
Percentage of Respondents With Equipment Installed
by Type of Equipment and Business
Question 13: Indicate what equipment the shop is equipped with
Refrigerator
Deep freezer
Telkom telephone
Cellphone
Shelves
Counter
Cash register
Other
Type of business
Spaza/tuck shop
Shebeen
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
259
76.2 143
84.1
29
19.5
67
64.4 498
65.3
215
63.2 125
73.5
25
16.8
50
48.1 415
54.4
93
27.3
60
35.3
4
2.7
17
16.3 174
22.8
160
47.1
59
34.7
38
25.5
50
48.1 307
40.2
258
75.9
71
41.8 22
14.8
37
35.6 388
50.9
209
61.5
67
39.4
15
10.1
34
32.7 325
42.6
69
20.3
29
17.1
4
2.7
18
17.3 120
15.7
7
2.1
3
1.8 59
39.6
12
11.5
81
10.6
Table 32(B)
Percentage of Respondents With Equipment Installed by Type of
Equipment and Urbanisation
Refrigerator
Deep freezer
Telkom telephone
Cellphone
Shelves
Counter
Cash register
Other
Metropolitan
N
%
276
69.9
191
48.4
125
31.6
141
35.7
198
50.1
167
42.3
65
16.5
56
14.2
Urbanisation
Urban
Rural
N
%
N
%
123
67.6
99
53.2
115
63.2
109
58.6
32
17.6
17
9.1
80
44.0
86
46.2
103
56.6
87
46.8
96
52.7
62
33.3
30
16.5
25
13.4
13
7.1
12
6.5
Total
N
%
498 65.3
415
54.4
174 22.8
307 40.2
388 50.9
325 42.6
120
15.7
81
10.6
Table 33(A)
Percentage of Equipment Owned by Coca-Cola
by Type of Equipment and Business
Refrigerator
Deep freezer

N
%
N
%
97
37.5
42
29.4
6
2.8
3
2.4
Type of business
Hawker
Other
N
%
N
%
13
44.8
21
31.3
3
12.0
3
6.0
N
173
15
Total
%
34.7
3.6
Table 33(B)
Percentage of Equipment Owned by Coca-Cola by Type of Equipment
and Urbanisation
Refrigerator
Deep freezer
Metropolitan
N
%
108
39.1
4
2.1
Urbanisation
Urban
Rural
N
%
N
%
53
43.1
12
6.5
10
8.7
1
0.9
Total
N
173
15
%
34.7
3.6
Almost two thirds (65.3 %) of all respondents have a refrigerator but one third
(34.7 %) of these refrigerators belong to the Coca-Cola system. More than half (54.4 %)
has a deep-freezer and only 3.6 % of them belong to the Coca-Cola system. A low percentage of 22.8 % has Telkom phones while 40,2 % make use of cell phones. Even some
of the hawkers (14.8 %) indicated that they have shelves to display their goods while 10.1
% even claim they have a counter and 2.7 % a cash register. Tables 32(B) and 33(B)
show that relatively fewer respondents in the rural areas have refrigerators (53.2 %) and
only 6.5 % of these are owned by the Coca-Cola system.
Impact of refrigerated drinks on turnover

Tables 34(A) and (B) reflect the response to the question: Does having a fridge
help you sell more Coca-Cola products? No less than 73.5 % of all respondents confirm
that access to a fridge results in the selling of lots more Coca-Cola products. This is true
for all types of businesses, except hawkers. However, almost half (46.4 %) the hawkers
reported that this question is not applicable to them. If this group is excluded, 73.4 % of
the rest agrees that a fridge helps to sell more Coca-Cola products.
Table 34(A)
Having a Fridge Help Selling More Coca-Cola Products by Type of Business
Question 14: Does having a fridge help you sell more Coca-Cola products?
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
Yes
281
84.1 136
81.9
55
39.9
72
70.6 544
73.5
To some extent
29
8.7
12
7.2
13
9.4
6
5.9
60
8.1
No, it does not help at all 7
2.1
7
4.2
6
4.3
6
5.9
26
3.5
Not applicable
17
5.1
11
6.6
64
46.4
18
17.6 110
14.9
Total
334
100.0 166
100.0 138
100.0 102
100.0 740 100.0
Table 34(B)
Having a Fridge Help Selling More Coca-Cola Products by Urbanisation
Question 14: Does having a fridge help you sell more Coca-Cola products?
Yes
To some extent
No, it does not help at all
Not applicable
Total
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
255
66.4 137
77.8 152
84.4 544
73.5
43
11.2
9
5.1
8
4.4
60
8.1
18
4.7
3
1.7
5
2.8
26
3.5
68
17.7
27
15.3
15
8.3 110
14.9
384 100.0 176
100.0 180 100.0 740
100.0
Type of business accommodation of business

Table 35(A) shows that spazas and shebeens operate mostly from inside the main
house, (42.2 % and 46.7 % respectively) or from an outside building on the same property, (29.2 % and 28.7 % respectively). More than half (56.5 %) the hawkers do business
on the street while a third (35.3 %) of the other businesses operate from inside the main
house. Table 35(B) shows that relatively more businesses in rural areas (41.3 %) do
business from inside the main house than in the other two areas.
Table 35(A)
Type of Business Accommodation by Type of Business
Question 15: Type of shop accommodation
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
143
42.2 78
46.7
3
2.0
36
35.3 260
34.4
Inside main house

Outside building on
same property
99
29.2 48
Building other than home
44
13.0 23
Metal container(railway/ship) 10
2.9
3
Shack
20
5.9
5
Zozo
4
1.2
3
Fixed stall in market
2
0.6
2
Vehicle, cart, temporarystall in a market
Other temporary structure
Construction site
No fixed location/mobile
1
0.3
On the street
3
0.9
Other
13
3.8
5
Total
339
100.0 167
28.7
13.8
1.8
3.0
1.8
1.2
2.0
7
5
3
4
9
9
4.8
3.4
2.0
2.7
6.1
6.1
11
83
3.0
10
100.0 147
7.5
56.5
6.8
100.0
9
12
9
4
1
6
2
5
2
8.8 159
11.8 79
8.8 29
3.9 34
1.0
11
5.9
14
2.0
11
4.9
14
2.0
2
12
8
7.8 94
8
7.8 36
102 100.0 755
21.1
10.5
3.8
4.5
1.5
1.9
1.5
1.9
0.3
1.6
12.5
4.8
100.0
Table 35(B)
Type of Business Accommodation by Urbanisation
Question 15: Type of shop accommodation
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
Inside main house
124
31.6
60
33.7
76
41.3 260
34.4
Outside building on same property
77
19.6
47
26.4
35
19.0 159
21.1
36
9.2
24
13.5
19
10.3
79
10.5
Metal container(railway/ship)
21
5.3
1
0.6
7
3.8
29
3.8
Shack
15
3.8
15
8.4
4
2.2
34
4.5
Zozo
4
1.0
7
3.8
11
1.5
9
2.3
3
1.7
2
1.1
14
1.9
Vehicle. cart. temporarystall in a market 8
2.0
1
0.6
2
1.1
11
1.5
6
1.5
4
2.2
4
2.2
14
1.9
Construction site
1
0.3
1
0.5
2
0.3
5
1.3
6
3.4
1
0.5
12
1.6
On the street
67
17.0
11
6.2
16
8.7
94
12.5
Other
20
5.1
6
3.4
10
5.4
36
4.8
Total
393
100.0 178
100.0 184
100.0 755
100.0
Direct access to electricity and tap water

Three quarters of the respondents (74.7 %) said they have direct access to electricity (table 36). If the not applicable group is excluded from the table, the percentage with
access will increase to 81.6 % of the remaining 684 respondents. The percentage of
respondents in rural areas with access to electricity is 69.9 % and if the not applicable
group (16 respondents) is excluded the percentage is 76.6 %.
Table 36(A)
Direct Access to Electricity by Type of Business
Question 16: Does your shop have direct access to electricity on the same stand?
Yes
No
Not applicable
Total
Type of business
Spaza/tuck shop
Shebeen
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
304
90.7
155
91.7
24
16.9
75
74.3 558
74.7
21
6.3
9
5.3
78
54.9
18
17.8 126
16.9
10
3.0
5
3.0
40
28.2
8
7.9
63
8.4
335 100.0 169 100.0 142 100.0 101 100.0 747 100.0
Table 36(B)
Direct Access to Electricity by Urbanisation
Question 16: Does your shop have direct access to electricity on the same stand?
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
285
74.4 145
80.1 128
69.9 558
74.7
59
15.4
28
15.5
39
21.3 126
16.9
39
10.2
8
4.4
16
8.7
63
8.4
383
100.0 181
100.0 183 100.0 747
100.0
Yes
No
Not applicable
Total
Almost two thirds of the respondents (64.9 %) have access to tap water (table 37).
However, the percentage for the rural areas is much lower (49.7 % in table 37(B)).
Employment
Tables 38 to 45 show the total as well as the average number of people employed,
including the owner/manager.
Total employment
Table 45 shows that the 732 businesses included in the study employed a total of 1
651 people of which 1 248 were permanent and 403 part-time. More females (864) than
males (787) were employed. The average employment of 2.26 people per business
Table 37(A)
Direct Accessto Tap Water by Type of Business
Question 16: Does your shop have direct access to water on the same stand?
Yes
No
Not applicable
Total
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
249
76.9 136
81.4
23
16.2
68
67.3 476
64.9
66
20.4
25
15.0
79
55.6
25
24.8 195
26.6
9
2.8
6
3.6
40
28.2
8
7.9
63
8.6
324
100.0 167
100.0 142
100.0 101
100.0 734 100.0
Table 37(B)
Direct Access to Tap Water by Urbanisation
Question 16: Does your shop have direct access to water on the same stand?
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
260
68.8 129
71.3
87
49.7 476
64.9
78
20.6
44
24.3
73
41.7 195
26.6
40
10.6
8
4.4
15
8.6
63
8.6
378
100.0 181
100.0 175 100.0 734
100.0
Yes
No
Not applicable
Total
includes working owners. Similar information as in table 45 is shown for spazas in table
38, shebeens in table 39, for hawkers in table 40, for other businesses in table 41, for
metropolitan areas in table 42, for urban areas in table 43, and for rural areas intable 44.
Average employment is as follows:
Type of business
Spazas
Hawkers
2.34
1.70
Metropolitan
2.49
Rural
1.79
Shebeens
Other
2.41
2.52
Urban
Total
2.24
2.26
Owners were asked in question 23 how many of their employees are members of
their family of household. The averages are as follows:
Type of business
Spaza
Hawker
1.41
0.51
Shebeen
Other
1.23
0.98
M+F
Ttl
Avg
434
1.33
156
0.48
590 1.81
M+F
Ttl
Avg
42
0.13
24
0.07
66
0.20
African
Female
Ttl
Avg
221
0.68
74
0.23
295 0.91
Coloured
Female
Ttl
Avg
25
0.08
15
0.05
40
0.13
Asian
Female
Ttl
Avg
31
0.10
17
0.05
48
0.15
White
Male
Female
Ttl
Avg Ttl
Avg
0.00
1
0.00
0.00
8
0.02
0.00 9
0.02
Male
Ttl
Avg
30
0.09
19
0.06
49
0.15
Male
Ttl
Avg
Full-time
14
0.08
Part-time
7
0.04
Total
21
0.12
n = 167
Full-time
Part-time
Total
M+F
Ttl
Avg
266
1.59
67
0.40
333 1.99
M+F
Ttl
Avg
27
0.16
10
0.06
37
0.22
African
Female
Ttl
Avg
133
0.80
30
0.18
163 0.98
Coloured
Female
Ttl
Avg
13
0.08
3
0.02
16
0.10
Male
Ttl
Avg
1
0.01
0.00
1
0.01
Male
Ttl
Avg
13
0.08
2
0.01
15
0.09
White
Female
Ttl
Avg
0.00
0.00
0.00
Asian
Female
Ttl
Avg
12
0.07
4
0.02
16
0.09
Question 17: How many employees, including owner/manager, work in the business?
Male
Ttl
Avg
133
0.80
37
0.22
170 1.02
M+F
Ttl Avg
1
0.00
8
0.02
9
0.03
M+F
Ttl Avg
61
0.19
36
0.11
97 0.30
Male
Ttl
Avg
260 0.80
110
0.34
370 1.14
M+F
Ttl Avg
1
0.00
0.00
1
0.00
M+F
Ttl Avg
25
0.15
6
0.04
31
0.19
Male
Ttl
Avg
161
0.96
46
0.28
207 1.24
Table 39
Employment of Shebeens by Race, Gender and Full- and Part-Time
Male
Ttl
Avg
Full-time
17
0.05
Part-time
9
0.03
Total
26
0.08
n = 326
Full-time
Part-time
Total
Male
Ttl
Avg
213
0.65
82
0.25
295 0.90
Table 38
Employment of Spazas by Race, Gender and Full- and Part-Time
Total
Female
Ttl Avg
158 0.95
37 0.22
195 1.17
Total
Female
Ttl Avg
278 0.85
114 0.35
392 1.20
M+F
Ttl Avg
319 1.91
83 0.50
402 2.41
M+F
Ttl Avg
538 1.65
224 0.69
762 2.34
M+F
Ttl
Avg
189
1.34
28
0.20
217 1.54
M+F
Ttl
Avg
4
0.03
3
0.02
7
0.05
African
Female
Ttl
Avg
99
0.70
14
0.10
113 0.80
Coloured
Female
Ttl
Avg
1
0.01
2
0.01
3
0.02
Asian
Female
Ttl
Avg
6
0.04
0.00
6
0.04
White
Male
Female
Ttl
Avg Ttl
Avg
0.00
0.00
0.00
0.00
0.00
0.00
Male
Ttl
Avg
9
0.06
1
0.01
10
0.07
M+F
Ttl Avg
0.00
0.00
0.00
M+F
Ttl Avg
15
0.11
1
0.01
16 0.12
Male
Ttl
Avg
102
0.72
16
0.11
118 0.83
M+F
Ttl
Avg
161
1.64
44
0.45
205 2.09
M+F
Ttl
Avg
9
0.09
10
0.10
19
0.19
African
Female
Ttl
Avg
100
1.02
27
0.28
127 1.30
Coloured
Female
Ttl
Avg
8
0.08
6
0.06
14
0.14
Male
Ttl
Avg
61
0.62
17
0.17
78
0.79
Male
Ttl
Avg
1
0.01
4
0.04
5
0.05
Full-time
Part-time
Total
Full-time
Part-time
Total
Asian
Female
Ttl
Avg
10
0.10
3
0.03
13
0.13
White
Male
Female
Ttl
Avg Ttl
Avg
0.00
0.00
4
0.04
1
0.01
4
0.04 1
0.01
Male
Ttl
Avg
3
0.03
2
0.02
5
0.05
M+F
Ttl Avg
0.00
5
0.05
5
0.05
M+F
Ttl Avg
13
0.13
5
0.05
18 0.18
Male
Ttl
Avg
65
0.66
27
0.28
92
0.94
Total
Female
Ttl Avg
118 1.20
37 0.38
155 1.58
M+F
Ttl Avg
183 1.87
64 0.65
247 2.52
Total
Female
M+F
Ttl Avg Ttl Avg
106 0.75 208 1.48
16
0.11
32 0.23
122 0.86 240 1.71
Table 41
Employment of Other Businesses by Race, Gender and Full- and Part-Time
Male
Ttl
Avg
Full-time
3
0.02
Part-time
1
0.01
Total
4
0.03
n= 141
Full-time
Part-time
Total
Male
Ttl
Avg
90
0.64
14
0.10
104 0.74
Table 40
Employment of Hawkers by Race, Gender and Full- and Part-Time
M+F
Ttl
Avg
601
1.61
115
0.31
716 1.92
M+F
Ttl
Avg
45
0.12
14
0.04
59
0.16
African
Female
Ttl
Avg
307 0.82
58
0.16
365 0.98
Coloured
Female
Ttl
Avg
24
0.06
7
0.02
31
0.08
Asian
Female
Ttl
Avg
58
0.16
24
0.06
82
0.22
White
Male
Female
Ttl
Avg Ttl
Avg
0.00
0.00
0.00
0.00
0.00
0.00
Male
Ttl
Avg
51
0.14
23
0.06
74
0.20
Male
Ttl
Avg
Full-time 14
0.08
Part-time 14
0.08
Total
28
0.16
n= 173
Male
Ttl
Avg
83
0.48
52
0.30
135 0.78
M+F
Ttl
Avg
192
1.11
105
0.61
297 1.72
M+F
Ttl
Avg
37
0.21
33
0.19
70
0.40
African
Female
Ttl
Avg
109
0.63
53
0.31
162 0.94
Coloured
Female
Ttl
Avg
23
0.13
19
0.11
42
0.24
Male
Ttl
Avg
1
0.01
4
0.02
5
0.03
Male
Ttl
Avg
4
0.02
1
0.01
5
0.03
White
Female
Ttl
Avg
1
0.01
9
0.05
10
0.06
Asian
Female
Ttl
Avg
1
0.01
0.00
1
0.01
Full-time
Part-time
Total
M+F
Ttl Avg
0.00
0.00
0.00
M+F
Ttl Avg
109 0.29
47
0.13
156 0.42
Male
Ttl
Avg
366 0.98
87
0.23
453 1.21
Total
Female
Ttl Avg
389 1.04
89 0.24
478 1.28
M+F
Ttl Avg
2
0.01
13
0.08
15 0.09
M+F
Ttl Avg
5
0.03
1
0.01
6
0.04
Male
Ttl
Avg
102
0.59
71
0.41
173 1.00
Total
Female
Ttl Avg
134 0.77
81 0.47
215 1.24
Table 43
Employment in Urban Areas by Race, Gender and Full- and Part-Time
Male
Ttl
Avg
Full-time 21
0.06
Part-time 7
0.02
Total
28
0.08
n = 374
Full-time
Part-time
Total
Male
Ttl
Avg
294
0.79
57
0.15
351 0.94
Table 42
Employment in Metropolitan Areas by Race, Gender and Full- and Part-Time
M+F
Ttl Avg
236 1.36
152 0.88
388 2.24
M+F
Ttl Avg
755 2.02
176 0.47
931 2.49
M+F
Ttl
Avg
257
1.39
75
0.41
332 1.80
M+F
Ttl
Avg
0.00
0.00
0.00
African
Female
Ttl
Avg
137
0.74
34
0.18
171 0.92
Coloured
Female
Ttl
Avg
0.00
0.00
0.00
White
Male
Female
Ttl
Avg Ttl
Avg
0.00
0.00
0.00
0.00
0.00
0.00
Asian
Male
Female
Ttl
Avg Ttl
Avg
0.00
0.00
0.00
0.00
0.00 0.00
M+F
Ttl Avg
0.00
0.00
0.00
M+F
Ttl Avg
0.00
0.00
0.00
Male
Ttl
Avg
120
0.65
41
0.22
161 0.87
Total
Female
Ttl Avg
137 0.74
34 0.18
171 0.92
M+F
Ttl Avg
257 1.39
75
0.41
332 1.80
Male
Ttl
Avg
Full-time 35
0.05
Part-time 21
0.03
Total
56
0.08
n = 732
Full-time
Part-time
Total
Male
Ttl
Avg
497
0.68
150
0.20
647 0.88
Male
Ttl
Avg
1
0.00
4
0.01
5
0.01
Coloured
Female
Ttl
Avg
47
0.06
26
0.04
73
0.10
M+F
Ttl
Avg
82
0.11
47
0.06
129 0.17
Male
Ttl
Avg
55
0.08
24
0.03
79
0.11
African
Female
M+F
Ttl
Avg
Ttl
Avg
553
0.76 1 050 1.43
145
0.20 295 0.40
698 0.96 1 345 1.83
White
Female
Ttl
Avg
1
0.00
9
0.01
10
0.01
Asian
Female
Ttl
Avg
59
0.08
24
0.03
83
0.11
M+F
Ttl Avg
2
0.00
13
0.02
15 0.02
M+F
Ttl Avg
114 0.16
48
0.07
162 0.23
Male
Ttl
Avg
588 0.80
199
0.27
787 1.07
Total
Female
M+F
Ttl Avg Ttl Avg
660 0.90 1 248 1.70
204 0.28 403 0.55
864 1.18 1 651 2.25
Table 45
Employment by All Respondents Included in the Study by Race, Gender and Full- and Part-Time
Male
Ttl
Avg
Full-time 0.00
Part-time 0.00
Total
0.00
n = 185
Full-time
Part-time
Total
Male
Ttl
Avg
120
0.65
41
0.22
161 0.87
Table 44
Employment in Rural Areas by Race, Gender and Full- and Part-Time
Metropolitan
Rural
1.19
0.55
Urban
Total
1.29
1.14
A comparison of the average number of household members employed with the

average of total employment shows that many of these businesses can be considered as
family businesses.
Features Of Ownership And Management
Status of owner
Table 46(A) shows that 83.4 % of the owners with whom interviews were conducted are engaged in the businesses full-time. The percentages are as high as 90.5 %
for shebeens and 94.6 % for hawkers. Full-time owner engagement in the rural areas
(77.7 %) is lower than in the metropolitan (86.3 %) and urban (83.1 %) areas (table
46(B)).
Gender of owner
More owners of spazas (55.0 %) and shebeens (58.4 %) are male than female
while the opposite is true for hawkers, where 52.1 % owners are female, and the other
businesses, where 54.5 % owners are female (table 47(A)).
Table 46(A)
Full- or Part-Time Engagement of Owner in the Business by Type of
Business
Question 18a: Is the owner engaged full or part-time in the business?
Full-time
Part-time
Total
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
255
77.3 152
90.5 139
94.6
78
75.7 624
83.4
75
22.7
16
9.5
8
5.4
25
24.3 124
16.6
330
100.0 168
100.0 147
100.0 103
100.0 748 100.0
Table 46(B)
Full- or Part-Time Engagement of Owner in the Business
by Urbanisation
Question 18a: Is the owner engaged full or part-time in the business?
Full-time
Part-time
Total
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
334
86.3 147
83.1
143
77.7 624
83.4
53
13.7
30
16.9
41
22.3 124
16.6
387
100.0 177
100.0 184
100.0 748
100.0
Table 47(A)
Gender of Owner by Type of Business
Question 18b: Gender of owner
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
181
55.0
97
58.4
70
47.9
46
45.5 394
53.1
148
45.0
69
41.6
76
52.1
55
54.5 348
46.9
329
100.0 166
100.0 146
100.0 101 100.0 742
100.0
Male
Female
Total
Table 47(B)
Gender of Owner by Urbanisation
Question 18b: Gender of owner
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
204
53.7
91
51.1
99
53.8 394
53.1
176
46.3
87
48.9
85
46.2 348
46.9
380
100.0 178
100.0 184
100.0 742 100.0
Male
Female
Total
Table 48(A)
Race of Owner by Type of Business
Question 18c: Population group of owner?
African
Asian
Coloured
White
Total
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
258
77.2 140
82.4 127
87.6
79
78.2 604
80.5
41
12.3
16
9.4
11
7.6
10
9.9
78
10.4
33
9.9
13
7.6
6
4.1
9
8.9
61
8.1
2
0.6
1
0.6
1
0.7
3
3.0
7
0.9
334
100.0 170
100.0 145 100.0 101
100.0 750
100.0
Race of owner
Table 48 shows that 80.5 % of the owners of the businesses interviewed are African (black), 10.4 % Asian, 8.1 % coloured and only 0.9 % white.
Nationality of owner
Almost all (98.8 %) businesses where interviews were conducted belong to South
Africans (table 49).
Table 48(B)
Race of Owner by Urbanisation
Question 18c: Population group of owner?
African
Asian
Coloured
White
Total
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
279
72.5 140
78.2 185
99.5 604
80.5
76
19.7
2
1.1
78
10.4
28
7.3
32
17.9
1
0.5
61
8.1
2
0.5
5
2.8
7
0.9
385
100.0 179
100.0 186
100.0 750
100.0
Table 49(A)
Nationality of Owner by Type of Business
Question 18c: Nationality of owner?
South African
Other
Total
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
320
98.5 164
100.0 139
97.2 98
100.0 721
98.8
5
1.5
4
2.8
9
1.2
325
100.0 164
100.0 143
100.0 98
100.0 730 100.0
Table 49(B)
Nationality of Owner by Urbanisation
Question 18c: Nationality of owner?
South African
Other
Total
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
366
98.4 174
98.3
181
100.0 721
98.8
6
1.6
3
1.7
9
1.2
372 100.0 177
100.0 181 100.0 730
100.0
Work done by owner

As can be expected from owners of micro-, very small and small businesses they
have to fulfill many functions. Table 50 shows that their functions include those of
management (89.1 %), cashier (59.6 %), stock clerk (56.5 %), driver (26.1 %) and a
number of other duties (3.0 %). Shebeens are mostly (92.9 %) managed by their owners
(table 50(A)) while owners of businesses in rural areas (80.1 %) are less involved in
running their businesses when compared with owners of metropolitan (92.4 %) and
urban areas (91.2 %).
Table 50(A)
Type of Work Done by Owner by Type of Business
Question 19: Work done by owner?
Management
Cashier
Stock clerk
Driver
Other
Spaza/tuck shop
N
%
300
88.2
200
58.8
201
59.1
97
28.5
8
2.4
Type of business
Shebeen
Hawker
Other
N
%
N
%
N
%
158
92.9
132
88.6
90
86.5
97
57.1
102
68.5
56
53.8
96
56.5
85
57.0
49
47.1
53
31.2
23
15.4
26
25.0
3
1.8
7
4.7
5
4.8
Total
N
%
680 89.1
455 59.6
431 56.5
199 26.1
23
3.0
Table 50(B)
Type of Work Done by Owner by Urbanisation
Question 19: Work done by owner?
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
365
92.4 166
91.2
149
80.1
262
66.3
97
53.3
96
51.6
263
66.6 88
48.4
80
43.0
127
32.2
39
21.4
33
17.7
13
3.3
2
1.1
8
4.3
Management
Cashier
Stock clerk
Driver
Other
N
680
455
431
199
23
Total
%
89.1
59.6
56.5
26.1
3.0
Table 51(A)
Running of Business by Type of Business
Question 20: Who runs the business?
Owner
Manager
Employee
Family member
Total
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
264
78.3
152
89.4 142
95.3
80
76.9 638
83.9
20
5.9
3
1.8
2
1.3
4
3.8 29
3.8
16
4.7
5
2.9
3
2.0
12
11.5
36
4.7
37
11.0
10
5.9
2
1.3
8
7.7
57
7.5
337 100.0 170
100.0 149
100.0 104
100.0 760 100.0
Management
Respondents were asked who the business is run by (Question 20). Table 51
shows the responses to this question. The vast majority of businesses (83.9 %) are run
by the owners. A further 7.5 % are run by a family member of the owner. This is especially true for spazas (11.0 %) and other businesses (7.7 %) and more so in rural (13.4 %)
than in metropolitan (4.3 %) and urban (8.3 %) areas.
Table 51(B)
Running of Business by Urbanisation
Question 20: Who runs the business?
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
335
85.2 154
85.1 149
80.1 638
83.9
21
5.3
2
1.1
6
3.2
29
3.8
20
5.1
10
5.5
6
3.2
36
4.7
17
4.3
15
8.3
25
13.4
57
7.5
393
100.0 181
100.0 186 100.0 760
100.0
Owner
Manager
Employee
Family member
Total
Table 52(A)
Owners With Business Training by Type of Business
Question 21: Do you have any business training?
Type of business
Hawker
Other
Total
N
34
303
337
Yes
No
Total
%
N
10.1
10
89.9 159
100.0 169
%
N
5.9
9
94.1 138
100.0 147
%
N
6.1
9
93.9
95
100.0 104
%
N
8.7
62
91.3 695
100.0 757
%
8.2
91.8
100.0
Table 52(B)
Owners With Business Training by Urbanisation
Question 21: Do you have any business training?
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
30
7.6
22
12.3
10
5.4
363
92.4 157
87.7
175
94.6
393
100.0 179
100.0 185 100.0
Yes
No
Total
Total
N
62
695
757
%
8.2
91.8
100.0
Business training
Very few (8.2 %) of the owners of the businesses indicated that they had some
business training (table 52). The following types of training were mentioned by those
who underwent training:
Marketing/selling
Money management
Stock control
Computer training
Business management
More than half (51.5 %) the owners of businesses said they need some business
training (table 53). The percentages for owners of spazas (55.2 %) and shebeens (53.5
%) are higher than those for hawkers (45.6 %) and other (44.2 %). Owners in rural
areas (80.1 %) are far more in need of training than those of metropolitan (37.9 %) and
urban (51.4 %) areas.
Table 53(A)
Owners Who Said They Need Business Training by Type of Business
Question 22: Do you think you need business training?
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
186
55.2
91
53.5
67
45.6
46
44.2 390
51.5
151
44.8
79
46.5
80
54.4
58
55.8 368
48.5
337 100.0 170
100.0 147
100.0 104
100.0 758
100.0
Yes
No
Total
Table 53(B)
Owners Who Said They Need Business Training by Urbanisation
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
148
37.9 93
51.4 149
80.1 390
51.5
243
62.1 88
48.6
37
19.9 368
48.5
391
100.0 181
100.0 186
100.0 758 100.0
Yes
No
Total
Owners who indicated that they are interested in training were asked to rank their
training needs in order of importance. Their ranking order was used to construct an
index according to priorities. Table 54 shows that training in management is the most
urgent need among owners, followed by bookkeeping, computer skills and marketing.
Training needs do not differ substantially between the types of businesses (table 54(A))
but there are slight differences in the priority allocated of types of training between areas
(table 54(B)).
Financing Of Business
As mentioned before, current financial or even financial information of any nature whatsoever was hard to come by from respondents. No information is supplied for
questions where too few respondents responded.
Start-up capital
On average, businesses were started with 1,972.14 rand (table 55). Rural businesses (1,451.83 rand ) needed far less initial capital than businesses in metropolitan
Table 54(A)
Training Needs of Owners in Order of Importance by Type of Business
Training Need
Management
Bookkeeping
Computer skills
Marketing
Customer or human
relations
Sales
Credit control
Labour relations
Type of business
Spaza/tuckshop Shebeen
Hawker
Other
Total
Index
Index
Index
Index
Index
Value Rank Value Rank Value Rank Value Rank Value Rank
227
1
113
1
78
1
62
1
480
1
152
2
69
2
55
2
36
2
312
2
115
3
47
3
32
5
35
3
229
3
109
4
45
4
35
4
27
4
216
4
75
78
48
28
6
5
7
8
42
30
24
5
5
6
7
8
42
31
17
7
3
6
7
8
21
17
15
6
5
6
7
8
180
156
104
46
5
6
7
8
Table 54(B)
Training Needs of Owners in Order of Importance by Urbanisation
Metropolitan
Urban
Rural
Total
Training Need
Index
Index
Index
Index
Value Rank Value Rank Value Rank Value Rank
Management
179
1
97
1
204
1
480
1
Bookkeeping
139
2
73
2
100
2
312
2
Computer skills
89
3
40
6
100
2
229
3
Marketing
87
4
53
4
76
4
216
4
Customer or human relations
60
5
50
5
70
5
180
5
Sales
49
6
54
3
53
7
156
6
Credit control
32
7
11
7
61
6
104
7
Labour relations
6
8
15
8
25
8
46
8
(2,006.72 rand) and urban areas (2,462.44 rand). Start-up capital needed by type of
business ranged from 643.77 rand for hawkers to 2,714.30 rand for shebeen owners.
Time required to mobilise sufficient start-up capital
Overall, more than half the businesses (54.0 %) managed to generate sufficient
start-up capital within a period of six months. However, 16.9 % of the businesses took
longer than a year to find funds to start operating (tables 56(A) and (B)). A comparison
by type of business confirms that the smaller the amount needed (eg hawkers) the
sooner the required capital was acquired.
Sources of finances
Table 55
Start-Up Capital by Type of Business
and Urbanisation
Respondents were asked to indicate all sources of finance to start their

Question 24: How much money was this business
businesses and, where applicable, the
started with?
amount borrowed, interest paid, the
installment and repayment period.
Type of business
Mean R N
Table 57 shows that more than two
Spaza/tuckshop
2,032.35
321
thirds (69.6 %) of respondents indicated Shebeen
2,714.30
150
that they used their own or household
Hawker
643.77
145
Other
2,598.02
99
members savings to start their busiAll
respondents
1,972.14
715
nesses. Stokvel money was used by 6.7
% as start-up funds. Stokvel money is a
Urbanisation
well-known method of saving amongst
Metropolitan
2,006.72
359
poorer community members in South
Urban
2,462.44
171
Africa. Community members, usually a
Rural
1,451.83
185
group of 12 people, belong to a stokvel
All respondents
1,972.14 715
club and each one contributes a relatively small amount to the club on a
monthly basis. Once a year a club member will receive the total contribution of all
members, which adds up to an amount that is enough to spend on an unusual item.
Table 56(A)
Time Required to Mobilise Start-Up Capital by Type Business
Question 25: How long did it take you to find the funds to start the business?
Type of business
Hawker
Other
N
%
N
%
N
%
N
%
Less than 6 months
155
47.1
84
51.5
98 66.7
63
61.8
6 12 months
75
22.8
30
18.4
22
15.0
15
14.7
More than 12 months
67
20.4
26
16.0
15
10.2
17
16.7
Not applicable
32
9.7
23
14.1
12
8.2
7
6.9
Total
329
100.0
163 100.0
147 100.0
102 100.0
Total
N
%
400
54.0
142
19.2
125
16.9
74
10.0
741 100.0
Table 56(B)
Time Required to Mobilise Start-Up Capital by Urbanisation
Question 25: How long did it take you to find the funds to start the business?
Less than 6 months

6 12 months
More than 12 months
Not applicable
Total
Metropolitan
N
%
225
58.7
66
17.2
50
13.1
42
11.0
383 100.0
Urbanisation
Urban
Rural
N
%
N
%
85
48.3
90
49.5
31
17.6
45
24.7
38
21.6
37
20.3
22
12.5
10
5.5
176 100.0 182 100.0
Total
N
%
400
54.0
142
19.2
125
16.9
74
10.0
741 100.0
Table 57(A)
Sources of Finance by Type of Business
Question 26: Source of finance to start your business
Type of business
Hawker
Other
N
%
N
%
N
%
N
%
235
69.1
114
67.1
108
72.5
74
71.2
20
5.9
16
9.4
10
6.7
5
4.8
Savings
Stokvel
Loan from relative
or friend
37
Retrenchment
33
Loan from bank
8
Loan/money from
government institution Loan from informal
organisation/lender
4
Other
7
N
531
51
Total
%
69.6
6.7
10.9
9.7
2.4
14
17
4
8.2
10.0
2.4
16
5
2
10.7
3.4
1.3
8
11
3
7.7
10.6
2.9
75
66
17
9.8
8.7
2.2
0.7
0.1
1.2
2.7
2
4
1.2
2.4
2
7
1.3
4.7
3
2
2.9
1.9
11
20
1.4
2.6
Table 57(B)
Sources of Finance by Urbanisation
Question 26: Source of finance to start your business
Metropolitan
N
%
Savings
273
69.1
Stokvel
20
5.1
Loan from relative or friend
27
6.8
Retrenchment
42
10.6
Loan from bank
7
1.8
Loan/money from government institution 1
0.3
Loan from informal organisation/lender 7
1.8
Other
15
3.8
Urbanisation
Urban
Rural
N
%
N
%
152
83.5
106
60.0
6
3.3
25
13.4
10
5.5
38
20.4
11
6.0
13
7.0
4
2.2
6
3.2
2
4
1.1
2.2
2
1
1.1
0.5
Total
N
%
531
69.6
51
6.7
75
9.8
66
8.7
17
2.2
1
0.1
11
1.4
20
2.6
Respondents also made use of loans from relatives and friends (9.8 %), retrenchment
payments (8.7 %), loans from banks (2.2 %), loans from informal money lenders (1.4 %)
and other sources (2.6 %).
So few respondents gave details on interest rates that they had to pay and on the
amounts borrowed that no tables are supplied for this information. However, the maximum amounts mentioned were as follows:
Type of business and source of money

Business Relative/friend
Bank
Government
Spaza
R25,000
R24,000
Shebeen
R6,000
R18,000
Hawker
R25,000
R19,000
R10,000
Other
R23,000
-
Informal
R25,000
R60,000
R20,000
R45,000
Other
R15,000
-
Informal
R60,000
R1,000
R20,000
Other
R15,000
-
Degree of urbanisation and source of money

Area
Relative/friend
Bank
Government
Metropolitan
R25,000
R24,000
R10,000
Urban
R10,000
R23,000
Rural
R25,000
R19,000
-
Government incentives
Table 58 confirms that very few of the businesses received any government development incentive or support. Only 1.6 % of all businesses received assistance. Support
was received in the form of free training.
Expansion And Growth Plans
Business expansion in terms of turnover
Just less than half (48.1 %) of all respondents indicated that their businesses had
expanded in terms of turnover during the preceding year. A further 9.7 % indicated that
Table 58(A)
Government Business Development Incentive by Type of Business
Question 27: Do you receive any government business development incentive?
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
5
1.5
4
2.4
2
1.4
1
1.0
12
1.6
334
98.5 164
97.6 144
98.6 103
99.0 745
98.4
339
100.0 168
100.0 146
100.0 104
100.0 757 100.0
Yes
No
Total
Table 58(B)
Government Business Development Incentive by Urbanisation
Question 27: Do you receive any government business development incentive?
Yes
No
Total
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
11
2.8
1
0.5
12
1.6
379
97.2 182
100.0 184
99.5 745
98.4
390
100.0 182
100.0 185
100.0 757 100.0
their turnover had decreased while 42.2 % indicated that turnover had remained the
same (table 59). More than half the shebeens (53.0 %) experienced an expansion in
their turnover while 54.3 % of the respondents from rural areas indicated an increase in
turnover.
Table 59(A)
Business Performance in Terms of Overall Turnover by Type of Business
Question 28: During the past 18 months has your business . . . in terms of overall performance
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
Expanded
160
49.7
87
53.0
56
40.6
44
45.4 347
48.1
Contracted
28
8.7
17
10.4
13
9.4
12
12.4
70
9.7
Remained the same size 134
41.6
60
36.6
69
50.0
41
42.3 304
42.2
Total
322
100.0 164
100.0 138
100.0 97
100.0 721
100.0
Table 59(B)
Business Performance in Terms of Overall Turnover by Urbanisation
Question 28: During the past 18 months has your business . . . in terms of overall performance
Expanded
Contracted
Remained the same size
Total
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
183
49.2
69
39.7
95
54.3
29
7.8
31
17.8
10
5.7
160
43.0
74
42.5
70
40.0
372
100.0 174 100.0
175 100.0
Total
N
%
347 48.1
70
9.7
304 42.2
721 100.0
A comparison of the percentages of respondents who indicated expanded business performance in terms of Coca-Cola products (table 60) with those indicating expanded turnover in general (table 59) shows slightly higher performances for Coca-Cola
for all types of businesses and areas except metropolitan areas where the percentages are
the same (49.2 %).
Respondents were also asked if their turnover expanded, what the total additional
amount invested in buildings, transport, equipment, etc was (question 28.1). Table 61
shows an average amount of 4,666.00 rand, which varies from 2, 151.00 rand for hawkers to 7,492.66 rand for shebeens.
Funding of expansion
Respondents were asked how business expansion was financed (Question 29).
The reply to this question (for those who expanded) is shown in table 62. Almost three
quarters (73.5 %) of respondents indicated that they used retained earnings from business to finance expansions. This is especially the case for hawkers (83.9 %) and other
Table 60(A)
Business Performance in Terms of Coca-Cola Products by Type of Business
Question 28: During the past 18 months has your business . . . in terms of Coca-Cola Products
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
Expanded
143
52.4
74
54.0
53
44.9 36
45.6 306
50.4
Contracted
23
8.4
9
6.6
10
8.5
5
6.3
47
7.7
Remained the same size 107
39.2
54
39.4
55
46.6 38
48.1 254
41.8
Total
273
100.0 137
100.0 118
100.0 79
100.0 607 100.0
Table 60(B)
Business Performance in Terms of Coca-Cola Products by Urbanisation
Question 28: During the past 18 months has your business . . . in terms of Coca-Cola Products
Expanded
Contracted
Total
Urbanisation
Metropolitan
Urban
Rural
N
%
N
%
N
%
155
49.2
70
42.4 81
63.8
16
5.1
25
15.2
6
4.7
144
45.7
70
42.4 40
31.5
315
100.0 165
100.0 127
100.0
Table 61
Average Additional Amount for
Expansion by Type of Business and
Urbanisation
Question 28: During the past 18 months has your
business . . . in terms of Coca-Cola Products
Type of business
MeanR
Spaza/tuckshop
Shebeen
Hawker
Other
4,188.23
7,492.26
2,151.00
3,588.00
122
58
30
28
4,666.00
238
6, 657.01
4,124.49
2,664.81
97
61
80
4,666.00
238
All respondents
Urbanisation
Metropolitan
Urban
Rural
All respondents
Total
N
%
306
50.4
47
7.7
254
41.8
607 100.0
Table 62(A)
Source of Funding of Expansion by Type of Business
Question 30: If expansion is planned: How are you going to finance the expansion?
Spaza/tuck shop
N
%
Retained earnings from
business
111
69.4
Stokvel
11
6.9
Loan from relative/friend 8
5.0
Savings (owner or household
members)
15
9.4
Loan from bank
3
1.9
Loan/money fromgovernment
institution
3
1.9
Loan from informal lender 4
2.5
Other
5
3.1
Shebeen
N
%
Type of business
Hawker
Other
N
%
N
%
60
6
4
68.9
6.9
4.6
47
4
1
83.9
7.1
7.1
37
84.1
7
3
8.0
3.4
7.1
4
2
Total
%
2.3
255
21
14
73.5
6.1
4.0
9.1
4.5
30
8
8.6
2.3
3
4
6
1.2
1.2
1.7
1.8
Table 62(B)
Source of Funding of Expansion by Urbanisation
Question 30: If expansion is planned: How are you going to finance the expansion?
N
126
10
2
14
4
Retained earnings from business

Stokvel
Loan from relative or friend
Savings (owner or household members)
Loan from bank
Loan/money from government institution
Loan from informal organisation/lender
3
Other
3
Urbanisation
Metropolitan
Urban
Rural
%
N
%
N
%
N
68.9
53
76.8
76
80.0
255
5.5
2
2.9
9
9.5
21
1.1
5
7.2
7
7.4
14
7.7
10
14.5
6
6.3
30
2.2
2
2.9
2
2.1
8
3
4.3
3
1.6
1
1.4
4
1.6
3
4.3
6
Total
%
73.5
6.1
4.0
8.6
2.3
0.9
1.2
1.7
businesses (84.1 %) and in rural areas (80.0 %). However, a wide variety of other
sources such as stokvels (6.1 %), loans from relatives/friends (4.0 %), savings (8.6 %),
loans from bank (2.3 %), loan from government (1.2 %), loan from informal money
lenders (1.2 %) and other sources (1.7 %) were also used.
Plans or intentions for future development
Respondents were asked to indicate from a list of nine plans or intentions for
development of their businesses which one they considered most important. Provision
was also made for their own inputs under other (specify). Table 63 shows continue
and maintain business at present size was mentioned by 162 or 39.0 % of the 415 respondents. This was followed by change informal business to formal business (26.3 %)
and move into another more profitable informal business (11.3 %).
Table 63(A)
Most Important Plan or Intention for Development by Type of Business
Question 29: What is your most important plan/intention for the development of your business in the
next year?
Spaza/tuck shop
Shebeen
Type of business
Hawker
Other
Total
N
Continue and maintain business
at present size
65
Change informal business to
formal business
54
Move into another more profitable
informal business
21
Switch to another line of
business
11
Acquire new/better skills through
training
17
Stop business and take up a
wage job
2
Employ somebody andbecome
less actively involved
4
Give business to children and
retire
1
Sell business and retire
1
Other
10
Total
186
34.9
46
46.9
27
34.6
24
45.3
162
39.0
29.0
18
18.4
26
33.3
11
20.8
109
26.3
11.3
14
14.3
10.3
7.5
47
11.3
5.9
4.1
10.3
13.2
30
7.2
9.1
7.1
5.1
3.8
30
7.2
1.1
2.0
5.1
1.9
2.2
2.2
1.0
1.9
1.4
0.5
3
0.5
5.4
3
100.0 98
3.1
4
2
5.7
16
100.0 415
1.0
0.5
3.9
100.0
3.1
100.0
1.3
78
100.0
3
53
Table 63(B)
Most Important Plan or Intention for Development by Urbanisation
Question 29: What is your most important plan/intention for the development of your business in the
next year?
Metropolitan
N
%
Continue and maintain business at
present size
63
Change informal business to formal
business
52
Move into another more profitable
informal business
19
Switch to another line of business
8
Acquire new/better skills through training 12
Stop business and take up a wage job
Employ somebody andbecome less actively
involved
4
Give business to children and retire
3
Sell business and retire
Other
5
Total
166
Urbanisation
Urban
Rural
N
%
N
%
Total
N
%
38.0
49
47.1
50
34.5
162
39.0
31.3
10
9.6
47
32.4
109
26.3
11.4
4.8
7.2
18
15
2
1
17.3
14.4
1.9
1.0
10
7
16
8
6.9
4.8
11.0
5.5
47
30
30
9
11.3
7.2
7.2
2.2
2.4
1.8
1.0
3.0
8
100.0 104
7.7
100.0
1
1
2
3
145
0.7
0.7
1.4
2.1
100.0
6
4
2
16
415
1.4
1.0
0.5
3.9
100.0
Financial Performance
A word of caution on interpreting financial statistics is necessary. In previous
studies by, inter alia, the BMR and the World Bank it was found that the average educational level of informal sector entrepreneurs is fairly low. Difficulties are experience in
financial bookkeeping. In fact, bookkeeping is almost non-existent. Moreover, business
finance and household needs are often so interwoven that it is difficult to distinguish
between pure business finance and personal finance. Spaza shops, for example, are
defined as a business operated in a section of an occupied residential home or in any
other structure on a stand in an area which is zoned for residential purposes and where
people live permanently. Costs of services such as electricity, water, sewerage, telephone
and security are almost impossible to divide between business expenses and household
expenditure.
Monthly turnover
Table 64
The average monthly turnover
Average Monthly Turnover of Sales by
of businesses amounted to 5,367.63
Type of Business and Urbanisation
rand (table 64), ranging from a high
Question 31: What was the turnover/sales of your
of 8,285.23 rand for shebeens to
business for the past month?
3,069.95 rand for hawkers. The
average monthly turnover in metroType of business
MeanR
N
politan areas (6,960.53 rand) and
Spaza/tuckshop
4,991.36
279
urban areas (4,812.70 rand) is higher
Shebeen
8,285.23
130
than in rural areas (3,306.13 rand).
Hawker
3,069.95
112
Other
5,163.17
83
Respondents were asked the actual
All
respondents
5,367.63
604
amounts of their turnover and averUrbanisation
ages were calculated from the
Metropolitan
6,960.53
276
amounts whereas in the previous
Urban
4,812.70
157
study averages were calculated by
Rural
3,306.13
171
taking the mid-points of the income
All respondents
5,367.63
604
categories as defined in the questionnaire. A direct comparison between
the two studies is therefore not advisable.
Operating cost
Respondents were requested to estimate the running cost of their businesses for
the last month by expenditure item. Tables 65(A) and (B) depict the estimated running
cost by area, expenditure item and business type. The word of caution expressed in
section 2.7 is particularly true for estimating the running cost of businesses. Table 65
shows that purchase of merchandise amounts to an average of 2,540.60 rand, which is
63.8 % of the total running cost of 3,983.17 rand of all respondents who supplied this
information. Purchase of merchandise is followed by salary and benefits to owner
(510.54 rand or 12.8 % of total running cost) and salaries and benefits to employees
Table 65(A)
Average Monthly Operating Cost by Type of Cost and Business
Question 32: Operating costs: Approximately how much did you spend last month on the following?
MeanR
MeanR
Purchase of merchandise
2,328.67
4,539.32
Salary and benefits to owner
589.08
496.09
Salaries & benefits to employees 330.05
476.47
Electricity, water and sewage
234.19
242.46
Transport for business
176.83
179.92
Telephone or fax for business
63.39
66.48
Cleaning materials for business
40.31
46.87
Storage costs of merchandise
6.22
6.77
Security of business
26.66
108.23
Other operating costs
6.15
2.07
Taxes
91.00
48.12
Interest payments
3.48
7.44
Total
3,896.03
6,220.25
Type of business
Hawker
Other
Total
MeanR
MeanR
MeanR
1,073.02
2,213.53 2,540.60
389.47
443.00
510.54
131.17
547.42
353.86
31.92
161.57
187.00
136.83
136.70
164.15
16.58
56.57
54.14
15.31
26.11
34.91
32.85
30.00
14.80
18.50
71.69
48.76
6.74
25.06
8.08
3.00
20.22
55.07
17.75
33.26
11.27
1,873.13
3,765.12 3,983.17
Table 65(B)
Average Monthly Operating Cost by Type of Cost and Urbanisation
Question 32: Operating costs: Approximately how much did you spend last month on the following?
Purchase of merchandise
Salary and benefits to owner
Salaries & benefits to employees
Electricity, water and sewage
Transport for business
Telephone or fax for business
Cleaning materials for business
Storage costs of merchandise
Security of business
Other operating costs
Taxes
Interest payments
Total
Metropolitan
MeanR
3,396.17
556.23
511.66
205.08
213.86
77.11
30.67
23.19
74.19
9.58
28.77
21.62
5,148.14
Urbanisation
Urban
Rural
MeanR
MeanR
2,347.45
1,109.98
469.05
464.16
199.52
204.36
199.79
140.50
124.90
108.04
27.70
36.18
27.08
50.45
2.93
10.37
24.20
24.36
8.11
5.20
123.10
39.26
0.54
2.02
3,554.38
2,194.88
Total
MeanR
2,540.60
510.54
353.86
187.00
164.15
54.14
34.91
14.80
48.76
8.08
55.07
11.27
3,983.17
(353.86 rand or 8.9 %). A comparison of running costs (table 65) with turnover (table
64) shows the following surplus of income over running costs:
Turnover
R
Type of business
Spaza
4,991.36
Shebeen
8,285.23
Hawker
3,069.95
Other
5,163.17
Metropolitan
6,960.53
Urban
4,812.70
Rural
3,306.13
Total
5,367.63
Costs
R
Surplus
R
3,896.03
6,220,25
1,873.13
3,765.12
1,095.33
2,064.98
1,196.82
1,398.05
21.9
24.9
39.0
27.1
5,148.14
3,554.38
2,194.88
3,983.17
1,812.39
1,258.32
1,111.25
1,384.46
26.0
26.1
33.6
25.8
The surplus of income over costs of 1,384.46 rand represents a surplus of 25.8 %
on turnover. This surplus varies by type of business from 21.9 % for spazas to 39.0 % for
hawkers and from 26.0 % in metropolitan to 33.6 % in rural areas. However, in actual
amounts, the average surplus of 1,111.25 rand in rural areas is only 88.3 % of the
1,258.32 rand surplus in urban and 61.3 % of the surplus of 1,812.39 rand in metropolitan areas.
Coca-Cola Products
Support by The Coca-Cola Company
Businesses were requested to indicate any support received from The Coca-Cola
Company. The response is shown in tables 66(A) and 65(B) by type of business and by
degree of urbanisation respectively.
Table 66(A)
Support by the Coca-Cola Company by Type of Business
Question 33: Did the Coca-Cola Company help with the following?
Product delivery
Equipment support
Kiosks
Push carts
Ice boxes
Trolleys
Short-term credit
Signage
Other
Type of business
Hawker
Other
Yes
No
Yes
No
Yes
No
Yes
No
%
%
%
%
%
%
%
%
34.7
65.3 24.1
75.9
11.0 89.0
28.9
71.1
26.6
73.4 21.1
78.9
10.7
89.3
27.8
72.2
0.8
99.2
0.8
99.2
3.4
96.6
2.4
97.6
3.1
96.9
2.3
97.7
11.7
88.3
1.2
98.8
2.8
97.2
3.0
97.0
20.8
79.2
4.7
95.3
2.7
97.3
1.5
98.5
13.4
86.6
3.6
96.4
0.8
99.2
1.5
98.5
100.0
100.0
27.1
72.9 17.1
82.9
10.8 89.2
19.5
80.5
3.7
96.3
100.0
5.9
94.1
100.0
Total
Yes
No
%
%
27.1
72.9
22.5
77.5
1.5
98.5
4.4
95.6
6.9
93.1
4.7
95.3
0.7
99.3
20.6
79.4
2.8
97.2
Table 66(B)
Support by the Coca-Cola Company by Urbanisation
Question 33: Did the Coca-Cola Company help with the following?
Product delivery
Equipment support
Kiosks
Push carts
Ice boxes
Trolleys
Short-term credit
Signage
Other
Metropolitan
Yes
No
%
%
26.2
73.8
24.6
75.4
1.2
98.8
5.4
94.6
6.8
93.2
5.1
94.9
1.2
98.8
20.6
79.4
5.2
94.8
Urbanisation
Urban
Rural
Yes
No
Yes
No
%
%
%
%
38.3
61.7
18.5
81.5
35.6 64.4
6.0
94.0
2.6
97.4
1.4
98.6
5.3
94.7
1.4
98.6
6.8 93.2
7.0
93.0
5.2 94.8
3.4
96.6
100.0
100.0
18.3
81.7
22.4
77.6
100.0
100.0
Total
Yes
No
%
%
27.1
72.9
22.5
77.5
1.5 98.5
4.4 95.6
6.9 93.1
4.7 95.3
0.7 99.3
20.6 79.4
2.8 97.2
Table 66(A) shows the support by the Company for all the business types. It is
evident that The Coca-Cola Company delivered Coca-Cola products to 27.1 % of all the
businesses while 22.5 % received equipment support and 20.6 % were supported with
signage. Other forms of support were limited.
Average sales per day of Coca-Cola products
Table 67(A) shows the average sales per day of Coca-Cola products during winter
by type of business and table 67(B) by degree of urbanisation. Tables 68(A) and (B)
show similar information for summer. The averages in the tables relate only to those
respondents who indicated that they sell the specific product referred to. The 70 spaza
shops who indicated that they sell 500 ml returnable glass bottles during winter, sell an
average of 15.3 bottles per day per business (table 67(A)) while the 73 who said they sell
the product during summer (table 68(A)) sell an average of 29.6 bottles. The 111 respondents in metropolitan areas sell an average 20.6 500 ml returnable glass bottles per day
during winter (table 67(A)) and 40.4 during summer (table 67(B)).
Mark-up on Coca-Cola products
Respondents were asked to give the price at which they buy and sell products in
which they trade by type of Coca-Cola product. Table 69(A) shows the cost price, selling
price and mark-up of Coca-Cola products by type of business and table 69(B) by degree
of urbanisation.
There is no mark-up consistency among specific businesses for any of the different Coca-Cola products. The number of businesses that trade in some of the products
listed in table 69 is also very low. The mark-up percentage varies from a low of 23.0 %
among the relatively few shebeens (5) who sell 200 ml cans to 81.8 % by the single
Table 67(A)
Average Number of Products Sold During Winter by Type of Product and
Business
Question 34: On average, how many units of Coca-Cola products do you sell per day?
Type of business
Hawker
Other
N Mean N Mean N Mean N Mean
70
15.29 27
15.19 36
35.56 21 11.90
300 ml non-returnable glassbottle 53
20.00 16 73.75 22
27.27 17 17.06
12
10.00 4 12.50 4
12.50 6 10.00
5
15.00 3 13.33 1
10.00 2 15.00
2 litre non-returnable plastic bottle 8
10.00 1 10.00
3 10.00
1.5 litre non-returnable plasticbottle 14
22.86 1 20.00 2
10.00 3 10.00
61
25.90 32 42.19 3
13.33 11 11.82
170
16.29 90 26.67 23
14.78 36 29.44
15.38 18 10.56 12
10.00 11 10.91
750 ml non-returnable plasticbottle 7
11.43 4 12.50
450 ml can
48
13.33 20 13.00 33
15.76 16 17.50
340 ml can
130
16.54 61 41.80 85
20.12 47 22.98
250 ml can
3
16.67
1 120.00 6
10.00 4 12.50
200 ml can
3
16.67 3 13.33 1
20.00 2 20.00
1 litre tetra (box)
6
15.00 3 10.00 2
15.00 1 10.00
200 ml tetra (box)
2
10.00
1 30.00
200 ml pouch
28
15.36
1 10.00 7
15.71 4 12.50
N
154
108
26
11
12
20
107
319
93
11
117
323
14
9
12
3
40
Total
Mean
19.55
28.98
10.77
14.55
10.00
19.50
28.98
20.60
13.23
11.82
14.53
23.19
20.00
16.67
13.33
16.67
15.00
Table 67(B)
Average Number of Products Sold During Winter by Type of Product and
Urbanisation

300 ml non-returnable glassbottle
1.5 litre non-returnable plasticbottle
750 ml non-returnable plasticbottle
450 ml can
340 ml can
250 ml can
200 ml can
1 litre tetra (box)
250 ml tetra (box)
200 ml tetra (box)
200 ml pouch
Metropolitan
N
Mean
111
20.63
66
34.85
21
10.95
5
18.00
9
10.00
13
23.85
84
31.79
152
23.62
4
32.50
3
10.00
84
13.81
219
28.08
7
10.00
3
16.67
8
12.50
2
26
10.00
16.15
Urbanisation
Urban
Rural
N
Mean
N
Mean
35
17.43 8
13.75
13
20.00 29
19.66
2
10.00 3
10.00
6
11.67
2
10.00 1
10.00
6
11.67
1
10.00
20
17.00 3
30.00
71
22.82 96
14.17
45
11.78 44
12.95
2
10.00 6
13.33
15
17.33 18
15.56
56
12.50 48
13.33
3
50.00 4
15.00
1
20.00 5
16.00
4
15.00 12
13.33
10
14.00
1
4
30.00
10.00
Total
N
Mean
154
19.55
108
28.98
26
10.77
11
14.55
12
10.00
20
19.50
107
28.97
319
20.60
93
13.23
11
11.82
117
14.53
323
23.19
14
20.00
9
16.67
3
40
16.67
15.00
Table 68(A)
Average Number of Products Sold During Summer by
Type of Product and Business
Spaza/tuck
N
73
54
13
6
8
1.5 litre non-returnable plasticbottle 14
59
170
7
450 ml can
50
340 ml can
139
250 ml can
3
200 ml can
2
1 litre tetra (box)
6
250 ml tetra (box)
1
200 ml tetra (box)
2
200 ml pouch
33
Type of Business
shop Shebeen
Hawker
Other
Total
Mean
N Mean
N Mean
N Mean N Mean
29.59 26
37.31 35
65.71 22
21.36 156 37.82
37.04 15
104.67 22
65.45 16
48.75 107 54.11
21.54
4
32.50 4
22.50 6
23.33 27 23.70
25.00
3
23.33 1
10.00 2
35.00 12 25.00
15.00
2
10.00
4
10.00 14 12.86
46.43
1
20.00 2
10.00 3
16.67 20 37.00
55.59 32
65.00 3
20.00 11
17.27 105 53.43
39.71 91
56.81 23
29.57 37
63.24 321 46.54
30.19 18
17.78 12
13.33 11
14.55 93 23.76
20.00 4
32.50
11 24.55
24.60 20
29.00 34
32.06 16
38.13 120 29.25
31.73 61
79.67 86
42.56 47
42.34 333 44.80
16.67
1
240.00 6
16.67 4
17.50
14 32.86
20.00
3
26.67 1
40.00 2
25.00
8 26.25
21.67
3
16.67 2
30.00 1
20.00 12 21.67
10.00
1
10.00
2 10.00
15.00
1
60.00
3 30.00
35.15
3
33.33 7
31.43 4
42.50 47 35.11
Table 68(B)
Average Number of Products Sold During Summer by
Type of Product and Urbanisation

1.5 litre non-returnable plasticbottle
450 ml can
340 ml can
250 ml can
200 ml can
1 litre tetra (box)
250 ml tetra (box)
200 ml tetra (box)
200 ml pouch
Metropolitan
N
Mean
111
40.36
64
64.69
22
24.55
6
28.33
11
10.91
13
48.46
83
59.40
152
50.59
4
50.00
3
23.33
83
31.08
224
54.55
7
18.57
3
40.00
1
2
27
10.00
15.00
32.96
Urbanisation
Urban
Rural
N
Mean
N
Mean
37
32.97
8
25.00
14
44.29 29
35.52
2
20.00
3
20.00
6
21.67
2
25.00
1
10.00
6
13.33
1
30.00
19
30.00
3
36.67
73
61.51
96
28.75
45
23.33 44
21.82
2
15.00
6
28.33
18
32.78
19
17.89
59
26.27 50
23.00
3
93.33
4
12.50
5
18.00
8
25.00
4
15.00
1
10.00
1
60.00
16
44.38
4
12.50
Total
N
Mean
156
37.82
107
54.11
27
23.70
12
25.00
14
12.86
20
37.00
105
53.43
321
46.54
93
23.76
11
24.55
120
29.25
333
44.80
14
32.86
8
26.25
12
21.67
2
10.00
3
30.00
47
35.11
Table 69(A)
Cost Price. Selling Price and Mark-Up of Coca-Cola Products by Type of Business
Question 35: What is the cost and selling price per unit for the following products?
Spaza/tuckshop
N
Rand
or %
Cost price
58
R2.61
Selling price
59
R3.69
Mark-up
%
41.4
Type of business
Shebeen
Hawker
Other
N
Rand
N
Rand
N
Rand
or %
or %
or %
Total
Rand
or %
20
20
R2.58
R3.90
51.3
27
27
R2.82
R4.09
45.0
19
19
R2.54
R3.95
55.5
124
125
R2.64
R3.85
45.8
300 ml non-returnable glass bottle

Cost price
47
R1.64
Selling price
47
R2.36
Mark-up
%
43.9
9
9
R1.75
R2.78
58.3
16
16
R1.60
R2.24
40.1
11
11
1.64
R2.36
44.2
83
83
R1.64
R2.38
44.9

Cost price
14
Selling price
14
Mark-up
%
R2.88
R4.20
46.5
2
2
R1.69
R2.10
24.6
3
3
R1.76
R2.40
36.6
5
5
R2.57
R3.82
48.6
24
24
R2.57
R3.73
44.9

Cost price
3
Selling price
3
Mark-up
%
R2.02
R2.26
32.2
2
2
R1.38
R2.35
70.9
1
1
R1.10
R2.00
81.8
1
1
R1.60
R2.00
25.0
7
7
R1.64
R2.39
45.2
2l non-returnable plastic bottle

Cost price
10
Selling price
9
Mark-up
%
1.5l non-returnable plastic bottle
R7.53
R9.22
22.4
4
4
R6.57
R8.62
31.2
2
2
R5.91
R7.75
31.1
3
3
R7.73
R9.99
29.3
19
18
R7.19
R9.05
25.9
Cost price
Selling price
Mark-up
R5.17
R7.12
37.6
6
7
R4.64
R6.16
32.8
1
1
R4.48
R7.00
56.3
2
1
R4.98
R7.00
40.6
16
18
R4.90
R6.73
37.3
1.5l returnable plastic bottle

Cost price
46
Selling price
52
Mark-up
%
R4.89
R6.58
34.4
17
22
R4.74
R6.78
42.9
2
2
R5.11
R6.90
35.0
9
10
R4.95
R6.74
36.3
74
86
R4.87
R6.65
36.6
1.25l returnable glass bottle

Cost price
Selling price
Mark-up
%
R4.38
R5.81
32.8
87
87
R4.38
R5.89
34.6
22
26
R4.45
R5.89
32.2
26
27
R4.44
R5.91
33.1
298
304
R4.39
R5.85
33.3
(cont)
7
9
%
163
164
Table 69(A) (Continued)

Spaza/tuckshop
N
Rand
or %
Cost price
37
Selling price
44
Mark-up
%
450 ml can
Cost price
53
Selling price
53
Mark-up
%
340 ml can
Cost price
111
Selling price
115
Mark-up
%
250 ml can
Cost price
6
Selling price
4
Mark-up
%
200 ml can
Cost price
4
Selling price
4
Mark-up
%
1l tetra (box)
Cost price
2
Selling price
2
Mark-up
%
200 ml tetra (box)
Cost price
3
Selling price
3
Mark-up
%
200 ml pouch
Cost price
25
Selling price
25
Mark-up
%
Type of business
Shebeen
Hawker
Other
N
Rand
N
Rand
N
Rand
or %
or %
or %
Total
Rand
or %
R3.98
R5.61
41.2
19
20
R3.92
R5.71
45.7
11
12
R3.89
R5.71
46.9
7
9
R3.90
R5.78
48.1
74
85
R3.94
R5.67
43.8
R2.84
R3.80
33.5
23
23
R2.86
R3.88
35.6
30
31
R2.90
R3.91
34.7
13
13
R2.93
R3.82
30.3
119
120
R2.87
R3.84
33.9
R2.79
R3.79
35.5
44
46
R2.76
R3.90
41.4
74
79
2.89
R3.92
35.9
43
45
R2.97
R3.89
31.2
272
285
R2.84
R3.86
35.9
R3.55
R1.91
28.4
1
5
R3.55
2.78
23.0
3
0
R3.33
-
1
0
R3.50
-
11
9
R3.48
R2.39
24.9
R1.91
R2.46
28.4
5
5
R2.78
R3.42
23.0
0
0
0
0
9
9
R2.39
R2.99
24.9
R3.88
R5.00
28.9
0
0
1
1
R3.76
R5.70
51.6
1
1
R3.76
R5.00
33.0
4
4
R3.82
R5.18
35.5
R0.89
R1.27
42.3
1
1
R0.92
R1.30
41.3
0
0
0
1
R1.30
-
4
5
R0.90
R1.28
42.6
R0.90
R1.30
44.1
2
2
R0.94
R1.30
38.3
8
8
R0.88
R1.28
45.1
2
2
R0.94
R1.30
38.3
37
37
R0.90
R.130
43.7
Table 69(B)
Cost Price. Selling Price and Mark-Up of Coca-Cola Products by Degree of
Urbanisation
Question 35: What is the cost and selling price per unit for the following products?
Metropolitan
N
Rand
or %
Urban
Rural
Total
N
Rand
N
Rand
N
Rand
or %
or %
or %

Cost price
Selling price
Mark-up
%
81
82
R2.71
R3.93
45.8
36
36
R2.35
R3.44
46.4
7
7
R3.42
R4.93
43.9
124
125
R2.64
R3.85
45.8
300 ml non-returnable glass bottle

Cost price
Selling price
Mark-up
%
46
46
R1.60
R2.34
46.5
12
12
R1.67
R2.31
38.4
25
25
R1.71
R2.49
45.2
83
83
R1.64
R2.38
44.9

Cost price
Selling price
Mark-up
%
15
15
R3.07
R4.59
49.5
7
7
R181
R2.17
20.0
2
2
R1.48
R2.65
79.1
24
24
R2.58
R3.73
44.9

Cost price
Selling price
Mark-up
%
4
4
R1.49
R2.30
54.9
1
1
R2.68
R3.00
12.4
2
2
R1.45
R2.25
55.7
7
7
R1.64
R2.39
45.2

Cost price
Selling price
Mark-up
%
16
16
R7.04
R8.93
26.9
3
2
R8.00
R9.99
24.9
0
0
19
18
R7.19
R9.05
25.9
1.5l non-returnable plastic bottle

Cost price
Selling price
Mark-up
%
11
14
R4.79
R6.62
38.3
5
4
R5.16
R7.13
38.1
0
0
16
18
R4.90
R6.73
37.3
1.5l returnable plastic bottle

Cost price
Selling price
Mark-up
%
55
67
R4.78
R6.66
39.2
18
18
R5.19
R6.73
29.6
1
1
R4.17
R5.50
31.9
74
86
R4.88
R6.65
36.6
1.25l returnable glass bottle

Cost price
Selling price
Mark-up
%
138
139
R4.40
R5.82
32.4
76
76
R4.31
R5.76
33.6
84
89
R4.46
R5.99
34.4
298
304
R4.39
R5.85
33.3
(cont)
Table 69(B) (Continued)

Metropolitan
N
Rand
or %
Cost price
Selling price
Mark-up
%
8
8
R4.02
R5.44
35.3
34
42
R3.89
R5.56
43.0
32
35
R3.98
R5.85
47.1
74
85
R3.94
R5.67
43.8
1
1
R3.00
R3.50
16.7
6
6
R4.22
R5.80
37.5
7
7
R4.04
R5.47
35.3
86
87
R2.83
R3.86
36.2
25
25
R2.99
R3.78
26.4
8
8
R2.92
R3.89
33.2
119
120
R2.88
R3.84
33.9
186
195
R2.83
R3.91
38.0
48
52
R2.90
R3.79
30.5
38
38
R2.81
R3.71
32.1
272
285
R2.84
R3.86
35.9
5
5
R2.52
R3.50
39.1
4
4
R3.03
R3.58
18.0
1
2
R1.88
R3.25
72.9
10
11
R2.66
R3.48
31.0
2
2
R1.68
R2.15
28.0
5
5
R2.79
R3.44
23.5
2
2
R2.13
R2.70
27.1
9
9
R2.39
R2.99
24.9
3
3
R0.89
R1.27
42.3
1
1
R0.92
R1.30
41.3
0
1
R1.30
4
5
R0.90
R1.28
42.6
22
22
R0.87
R1.29
48.3
12
12
R0.97
R1.32
35.3
3
3
R0.88
R1.30
47.7
37
37
R0.90
R1.30
43.7
750 ml non-returnable plastic bottle

Cost price
0
Selling price
0
Mark-up
%
450 ml can
Cost price
Selling price
Mark-up
340 ml can
Cost price
Selling price
Mark-up
250 ml can
Cost price
Selling price
Mark-up
200 ml can
Cost price
Selling price
Mark-up
200 ml tetra (box)
Cost price
Selling price
Mark-up
200 ml pouch
Cost price
Selling price
Mark-up
Urban
Rural
Total
N
Rand
N
Rand
N
Rand
or %
or %
or %
hawker who sells 200 ml returnable glass bottles. However, in general, it seems that the
percentage mark-up among shebeens is higher than among the other businesses.
Table 69(B) shows similar inconsistency in the percentage mark-up by area. The
mark-up varies from a low of 12.4 % for one respondent in an urban area who sells 200
ml returnable glass bottles to a high of 79.1 % for two respondents in rural areas who sell
250 ml returnable glass bottles. Besides the results being affected by the small number
of respondents, it is also possible that respondents could have mistakenly related the
cost price and price of a specific type of Coca-Cola product to the selling price of another.
Marketing And Advertising
Table 70(A) shows that all types of businesses included in the study use signboards as a marketing/advertising tool. The percentages for those with signboards vary
from 16.8 % for hawkers to 46.8 % for spazas. However, word of mouth is the most
general method of marketing/advertising mentioned by respondents (55.8 %), while
only a few have TVs in their shops (6.3 %), use brochures, flyers and/or pamphlets (7.1
%) and/or offer specials and promotions (8.3 %). More than half the respondents with
Table 70(A)
Marketing/Advertising Methods of Promotion by Type of Business
Question 36: What type of marketing/advertising methods do you use to promote your business?
Type of business
Spaza/tuck shop Shebeen Hawker
N
%
N
%
N
%
Signboard(s)
159
46.8
50
29.4
25
16.8
Brochures, flyers, pamphlets
30
8.8
10
5.9
7
4.7
Word of mouth
160
47.1
100
58.8 107
71.8
TV in shop for customers
19
5.6
18
10.6
2
1.3
Music in shop for customers
46
13.5
62
36.5
3
2.0
Posters
52
15.3
27
15.9
3
2.0
Offering of specials and promotions 28
8.2
23
13.5
6
4.0
Other
N
%
29
27.9
7
6.7
59
56.7
9
8.7
11
10.6
13
12.5
6
5.8
Total
N
%
263 34.5
54
7.1
426 55.8
48
6.3
122 16.0
95 12.5
63
8.3
Table 70(B)
Marketing/Advertising Methods of Promotion by Urbanisation
Urbanisation
Signboard(s)
Word of mouth
Posters
Offering of specials and promotions
Metropolitan
Urban
N
%
N
%
145
36.7
69
37.9
26
6.6
16
8.8
230
58.2 104
57.1
21
5.3
10
5.5
55
13.9
23
12.6
37
9.4
20
11.0
33
8.4
16
8.8
Rural
N
%
49
26.3
12
6.5
92
49.5
17
9.1
44
23.7
38
20.4
14
7.5
Total
N
%
263
34.5
54
7.1
426
55.8
48
6.3
122
16.0
95
12.5
63
8.3
Table 71(A)
Assistance by Coca-Cola in Marketing/Advertising by Type of Business
Type of business
Spaza/tuck shop
Shebeen
Hawker
Other
N
21
3
5
%
42.0
30.0
5.0
N
16
2
3
%
64.0
28.6
2.8
N
18
2
1
2
10
7
3.2
37.0
30.4
6
2
100.0
33.3
1
7
1
Total
N
Signboard(s)
100
7
Word of mouth
4
4
4
Posters
27
8
%
62.9
23.3
6.7
21.1
8.7
51.9
28.6
%
N
62.1 155
28.6 14
1.7
13
4
9.1
7
53.8 50
16.7 18
%
58.9
25.9
2.8
8.3
5.7
52.6
28.6
Table 71(B)
Assistance by Coca-Cola in Marketing/Advertising by Urbanisation
Urbanisation
Signboard(s)
Word of mouth
Posters
Metropolitan
N
%
75
51.7
8
30.8
8
3.5
3
14.3
3
5.5
31
83.8
11
33.3
Urban
N
%
59
85.5
5
31.3
4
3.8
1
10.0
4
17.4
12
60.0
4
25.0
Rural
N
%
21
42.9
1
8.3
1
1.1
7
3
18.4
21.4
N
155
14
13
4
7
50
18
Total
%
58.9
25.9
3.1
8.3
5.7
52.6
28.6
signboards (58.9 %) and posters (52.6 %) said they received assistance from The CocaCola Companyto put these up (table 71).
Business Problems
Table 72 shows the most important problems experienced by businesses covered
in the study. The table shows that 211 or 43.7 % of the 483 factors mentioned were high
crime rate, robbery and burglary. This was followed by severe competition/small
number of customers (22.6 %) and shortage/limited trading stock and finance (19.3 %).
High crime rate tops the list for all types of businesses (table 72(A)) but severe competition or small number of customers (33.8 %), shortage of/limited trading stock and
finance (31.6 %) and lack of adequate space/equipment (26.3 %) had higher percentages in the urban areas than crime (21.1 % in table 72(B)).
Table 72(A)
Problems Experienced by Type of Business
Type of business
Hawker
Other
N
%
N
%
N
%
N
%
High crime rate, robbery,
burglary
95
Severe competition/small number
of customers
49
Shortage/limited trading stock
and finance
40
Allowing too much credit/
bad debt
43
Lack of adequate space/
equipment
42
Unavailable/expensive
transport
22
Lack of water, electricity/poor
infrastructure
15
High trading stock prices
13
Other
15
Total
N
%
42.8
56
51.4
36
38.7
24
40.7
211
43.7
22.1
18
16.5
28
30.1
14
23.7
109
22.6
18.0
16
14.7
21
22.6
16
27.1
93
19.3
19.4
32
29.4
6.5
11.9
88
18.2
18.9
13
11.9
18
19.4
13
22.0
86
17.8
9.9
10
9.2
8.6
6.8
44
9.1
6.8
5.9
6.8
5
2
6
4.6
1.8
5.5
3
5
17
3.2
5.4
18.3
3
1
6
5.1
1.7
10.2
26
21
44
5.4
4.3
9.1
Table 72(B)
Problems Experienced by Urbanisation
Question 37: Indicate the three most important problems experienced by your business
Urbanisation
Metropolitan Urban
N
%
N
%
High crime rate, robbery, burglary
125
50.6 28
21.1
Severe competition/small number of customers 52
21.1
45
33.8
Shortage/limited trading stock and finance
28
11.3
42
31.6
Allowing too much credit/bad debt
53
21.5
14
10.5
Lack of adequate space/equipment
42
17.0 35
26.3
Unavailable/expensive transport
21
8.5
11
8.3
Lack of water, electricity/poor infrastructure
6
2.4
17
12.8
High trading stock prices
16
6.5
5
3.8
Other
22
8.9
14
10.5
Rural
Total
%
N
%
56.3 211
43.7
11.7 109
22.6
22.3 93
19.3
20.4 88
18.2
8.7 86
17.8
11.7 44
9.1
2.9 26
5.4
21
4.3
8
7.8 44
9.1
N
58
12
23
21
9
12
3
Crime
Table 73 shows that 29.4 % of the respondents said they had been victims of
crime during the preceding twelve months. The percentage for shebeens (32.5 %) and
hawkers (30.1 %) is slightly higher than for spazas (28.8 %) and other businesses (25.2
% in table 73(A)). Relatively more respondents in rural areas (34.4 %) than in metropolitan (31.1 %) and urban areas (20.6 %) have been victims (table 73(B)).
Table 73(A)
Victim of Crime During the Past Twelve Months by Type of Business
Question 38: Were you a victim of crime during the past twelve months?
Type of business
Hawker
Other
Total
N
%
N
%
N
%
N
%
N
%
97
28.8
54
32.5
44
30.1
26
25.2 221
29.4
240
71.2 112
67.5 102
69.9
77
74.8 531
70.6
337
100.0 166 100.0 146 100.0 103
100.0 752 100.0
Yes
No
Total
Table 73(B)
Victim of Crime During the Past Twelve Months by Urbanisation
Question 38: Were you a victim of crime during the past twelve months?
Urbanisation
Metropolitan
N
%
121
31.1
268
68.9
389 100.0
Yes
No
Total
Urban
Rural
Total
N
%
N
%
N
%
37
20.6
63
34.4 221
29.4
143
79.4 120
65.6 531
70.6
180 100.0 183 100.0 752 100.0
Table 74 shows the type of crime respondents have experienced. Of the 221
respondents who experienced crime, 69.2 % said they had break-ins and property theft,
13.6 % vandalism, 15.4 % employee theft and 29.9 % physical attacks.
Environmental Issues
Table 75(A) shows the usage of Coca-Cola containers after consumption by type of
business and table 75(B) by degree of urbanisation. More than a quarter (28.6 %) of the
respondents said they re-use the empty containers for, for example, toys and water
containers. A further 36.0 % said they collect them for recycling while 35.3 % discard
them. A full 70.0 % of the respondents indicated that there are no recycling depots or
centres in their vicinity (table 76). This is especially the case for rural areas where the
percentage indicating a lack of recycling depots or centres in their vicinity is 81.4 %
(table 76(B)).
Customers
Number of customers
Table 77 shows the percentage of businesses by customer numbers. More than a
quarter (28.0 %) said they serve fewer than 50 customers a week while 28.4 % said they
serve more than 100 customers a week. Hawkers generally serve more customers (31.5
Table 74(A)
Type of Crime Experienced by Type of Business
Question 39: If YES, list the type(s) of criminal activity (-ies) encountered.
Spaza/tuck shop
Shebeen
Type of business
Hawker
Other
Total
N
Break-ins and property theft
77
Vandalism
13
Employee theft
15
Physical attacks
29
Extortion
Employees were subject to crime
when arriving at/leaving
from work
7
Other
3
%
79.4
13.4
15.5
29.9
N
40
7
9
13
1
%
74.1
13.0
16.7
24.1
1.9
N
18
6
5
19
1
%
40.9
13.6
11.4
43.2
2.3
N
18
4
5
5
%
69.2
15.4
19.2
19.2
N
153
30
34
66
2
%
69.2
13.6
15.4
29.9
0.9
7.2
3.1
4
1
7.4
1.9
1
1
2.3
2.3
1
1
3.8
3.8
13
6
5.9
2.7
Table 74(B)
Type of Crime Experienced by Urbanisation
Question 39: If YES, list the type(s) of criminal activity (-ies) encountered.
Metropolitan
N
%
79
65.3
Vandalism
16
13.2
Employee theft
24
19.8
Physical attacks
49
40.5
Extortion
1
0.8
Employees were subject to crime when arriving
at/leaving from work
7
5.8
Other
3
2.5
Urbanisation
Urban
Rural
N
%
N
%
28
75.7
46
73.0
6
16.2
8
12.7
2
5.4
8
12.7
2
5.4
15
23.8
1
1.6
6
3
9.5
8.1
Total
N
%
153
69.2
30
13.6
34
15.4
66
29.9
2
0.9
13
6
5.9
2.7
Table 75(A)
Usage of Coca-Cola Products After Consumption by Type of Business
Question 40: For what purpose is packaging material of Coca-Cola products used after consumption?
Type of business
Spaza/tuck shop
Shebeen
Hawker
Other
Total
N
Re-used (eg toys, water holders) 97
Collected for recycling
128
Discarded
104
Other
18
%
28.5
37.6
30.6
5.3
N
51
61
49
7
%
30.0
35.9
28.8
4.1
N
44
51
71
5
%
29.5
34.2
47.7
3.4
N
26
35
45
10
%
25.0
33.7
43.3
9.6
N
218
275
269
40
%
28.6
36.0
35.3
5.2
Table 75(B)
Usage of Coca-Cola Products After Consumption by Urbanisation
Question 40: For what purpose is packaging material of Coca-Cola products used after
consumption?
Urbanisation
Urban
Rural
N
%
N
%
82
45.1
40
21.5
29
15.9
77
41.4
62
34.1
48
25.8
23
12.6
2
1.1
Metropolitan
N
%
Re-used (eg toys, water holders) 96
24.3
Collected for recycling
169
42.8
Discarded
159
40.3
Other
15
3.8
Total
N
%
218
28.6
275
36.0
269
35.3
40
5.2
Table 76(A)
Recycling Depot or Centre in Vicinity by Type of Business
Question 41: Is there a recycling depot/centre in your vicinity?
Type of business
Hawker
N
%
N
%
N
%
94
28.3
50
29.9
46
31.5
238
71.7
117
70.1
100
68.5
332 100.0 167 100.0 146 100.0
Yes
No
Total
Other
N
%
34
33.7
67
66.3
101 100.0
Total
N
%
224
30.0
522
70.0
746 100.0
Table 76(B)
Recycling Depot or Centre in Vicinity by Urbanisation
Question 41: Is there a recycling depot/centre in your vicinity?
Yes
No
Total
Metropolitan
N
%
137
35.8
246
64.2
383 100.0
Urbanisation
Urban
Rural
N
%
N
%
53
29.4
34
18.6
127
70.6
149
81.4
180 100.0
183 100.0
Total
N
%
224
30.0
522
70.0
746 100.0
Table 77(A)
Distribution of Businesses by Number of Customers and by Type of
Business
Question 42: How many customers do you serve per week?
Less than 50
50 - 100
More than 100
Total

N
%
N
%
87
25.7
44
25.9
154
45.6
79
46.5
97
28.7
47
27.6
338 100.0
170 100.0
Type of business
Hawker
Other
N
%
N
%
43
28.9
39
37.9
59
39.6
39
37.9
47
31.5
25
24.3
149 100.0
103 100.0
Total
N
%
213 28.0
331 43.6
216 28.4
760 100.0
Table 77(B)
Distribution of Businesses by Number of Customers and by
Urbanisation
Question 42: How many customers do you serve per week?
Metropolitan
N
%
79
20.1
179
45.4
136
34.5
394 100.0
Less than 50
50 - 100
More than 100
Total
Urbanisation
Urban
Rural
N
%
N
%
56
31.1
78
41.9
83
46.1
69
37.1
41
22.8
39
21.0
180 100.0 186 100.0
Total
N
%
213
28.0
331
43.6
216
28.4
760 100.0
Table 78(A)
Distribution of Businesses by Customer Spending and Type of Business
Question 43: How much does a customer spend on average during a visit to your shop?
Less than R10

R10 R25
More than R25
Total
Type of business
Hawker
N
%
N
%
N
%
N
78
23.1
23
13.6
72
48.3
39
205
60.8
86
50.9
67
45.0
45
54
16.0
60
35.5
10
6.7
18
337 100.0 169 100.0
149 100.0
102
Other
%
38.2
44.1
17.6
100.0
Total
N
%
212
28.0
403
53.2
142
18.8
757 100.0
Table 78(B)
Distribution of Businesses by Customer Spending and Urbanisation
Question 43: How much does a customer spend on average during a visit to your shop?
Metropolitan
N
%
99
25.2
215
54.7
79
20.1
393 100.0
Less than R10

R10 R25
More than R25
Total
Urbanisation
Urban
Rural
N
%
N
%
46
25.6
67
36.4
96
53.3
92
50.0
38
21.1
25
13.6
180 100.0
184 100.0
Total
N
%
212
28.0
403
53.2
142
18.8
757 100.0
% said they serve more than 100) than the other types of businesses (table 77(A) while
the customer base in metropolitan areas (34.5 % for 100+ customers) is larger than in
urban and rural areas.
Customer spending
Table 78 shows the distribution of businesses by customer spending during a
visit. More than a quarter (28.0 %) said their customers spend on average less than 10
rand per visit while 53.2 % said their customers spend on average between 10 rand and
25 rand per visit. The percentage of hawkers (48.3 %) who said their customers spent
less than 10 rand per visit is relatively high (table 78(A)) while the percentage of rural
respondents with customers who spend less than 10 rand is relatively high (36.4 %) in
comparison with the other areas.
Customer profile
Table 79(A) shows that the businesses included in the study have more male
(53.2 %) than female (46.8 %) customers. This is especially the case for shebeens
(64.0 % male customers) while the opposite is true for spazas (51.2 % female customers).
The businesses generally also serve more adults (56.5 %) than children (43.5 %) except
for spazas (52.7 % children). The average number of households that buy regularly at
the businesses is estimated by respondents as 28.3 households and varies from 22.2 for
other businesses to 34.6 for hawkers. Overall, the average number of people served
regularly is 52.7 persons. Surprisingly this number is higher for other businesses (64.3)
than for spazas (55.9), shebeens (39.2) and hawkers (53.3) whereas the number of
households for other businesses is lower than for spazas, shebeens and hawkers. The
reason may be that they have more family members that they serve regularly while that
is not the case with the other businesses. An average of 8.2 households are allowed to
buy on credit while the average number of persons allowed to buy on credit is 10.8. The
total amount of credit outstanding at the time of the survey date per business varied
from 142.63 rand for hawkers to 908.78 rand for shebeens with an average of 745.84
rand for all respondents who allow credit purchases.
Table 79(A)
Customer Profile by Type of Business
Question 44: Out of every ten people that you serve, how many on average are male or female?
Question 45: Out of every ten people that you serve, how many on average are adults and children?
Question 46: Give an estimate of the number of households or persons that regularly buy at this shop.
Question 49: State total amount of credit outstanding (owing by all customers) at this moment.
Gender
Male
Female
%
%
Age
Adult
Child
%
%
48.7
64.0
51.3
36.0
47.3
52.7
Number of households that regularly

buy at this shop
28.9
Number of persons that regularly
buy at this shop
55.9
Number of households allowed
to buy on credit
8.5
Number of persons allowed to
buy on credit
11.1
Total amount of credit
outstanding
873.10 rand
Hawker
51.5
48.5
Other
53.2
46.8
Total
53.2
46.8
71.7
28.3
58.4
41.6
59.3
40.7
56.5
43.5
26.7
34.9
22.2
28.3
39.2
53.3
64.3
52.7
8.1
6.5
8.2
8.2
11.5
7.5
13.5
10.8
908.78 rand
142.63 rand
591.49 rand 745.84 rand
Table 79(B)
Customer Profile by Urbanisation
Question 44: Out of every ten people that you serve, how many on average are male or female?
Question 45: Out of every ten people that you serve, how many on average are adults and children?
Question 46: Give an estimate of the number of households or persons that regularly buy at this shop.
Question 49: State total amount of credit outstanding (owing by all customers) at this moment.
Gender
Male
Female
%
%
Metropolitan
54.6
45.4
Urban
50.8
49.2
Rural
52.7
47.3
Total
53.2
46.8
Age
Adult
Child
%
%
59.7
40.3
54.4
45.6
51.9
48.1
56.5
43.5
34.5
65.3
9.1
12.0
21.9
36.0
7.9
10.2
25.5
48.5
7.2
9.8
28.3
52.7
8.2
10.8
Number of households that regularly buy at this shop

Number of persons that regularly buy at this shop
Number of households allowed to buy on credit
Number of persons allowed to buy on credit
Total amount of credit outstanding
917.19 rand 882.00 rand 499.27 rand 745.84 rand
Table 80 shows the frequency of settlement of accounts by customers as well as

the percentage of respondents who said they dont give credit to customers. Question 48
in the questionnaire allows for multiple responses for the frequency of settlement of
accounts. Hawkers usually expect their customers to settle their accounts weekly
(84.2 %). However, 60.5 % of them also allow monthly payments. Monthly settlement
of accounts is the most common method of settlement at spazas (79.6 %), shebeens (79.5
%) and other businesses (82.8 %). Table 80(A) shows that 63.0 % of spazas, 42.7 % of
shebeens, 62.9 % of hawkers and 63.4 % of other businesses give no credit. The percentages by degree of urbanisation (table 80(B)) shows no credit is given by 54.7 % of
the respondents in metropolitan areas, 49.1 % in urban areas and 28.5 % in rural areas.
Table 80(A)
Frequency of Settlement of Accounts by Type of Business
Question 48: State the frequency that accounts are settled
Frequency
Type of business

N
%
N
%
Weekly
70
33.2
35
39.8
Every two weeks
17
8.1
10
11.4
Every three weeks
5
2.4
6
6.8
Monthly
168
79.6
70
79.5
Longer than a month
3
1.4
2
2.3
No credit given
124
63.0
70
42.7
Hawker
N
%
32
84.2
1
2.6
2
5.3
23
60.5
1
2.6
90
62.9
Other
N
%
13
44.8
3
10.3
2
6.9
24
82.8
64
63.4
Total
N
%
150
41.0
31
8.5
15
5.6
285
77.9
6
1.6
348
46.8
Table 80(B)
Frequency of Settlement of Accounts by Urbanisation
Question 48: State the frequency that accounts are settled
Metropolitan
N
%
Urbanisation
Urban
Rural
N
%
N
%
Total
N
%
Weekly
103 66.0
26
34.7
21
15.6
150 41.0
Every two weeks

Every three weeks
Monthly
Longer than a month
No credit given
16
9
120
3
209
6
5
60
8.0
6.7
8.0
86
49.1
9
1
105
3
53
6.7
0.7
77.8
2.2
28.5
31
15
285
6
348
10.3
5.8
76.9
1.9
54.7
8.5
4.1
77.9
1.6
46.8
Table 81(A)
National Lotterys Effect On Sales by Type of Business
Question 50: Do you believe that the purchase of lottery tickets are the cause of a decline in your
turnover?
Spaza/tuck shop
N
%
Increased sales
18
5.8
Decreased sales
25
8.1
No change in sales
266
86.1
Total
309 100.0
Type of business
Shebeen
Hawker
Other
N
%
N
%
N
%
6
3.9
4
2.9
1
1.0
7
4.6
8
5.9
1
1.0
139
91.4
124
91.2
95
97.9
152 100.0
136 100.0
97 100.0
Total
N
%
29
4.2
41
5.9
624 89.9
694 100.0
Table 81(B)
National Lotterys Effect On Sales by Urbanisation
Question 50: Do you believe that the purchase of lottery tickets are the cause of a decline in
your turnover?
Increased sales
Decreased sales
No change in sales
Total
Metropolitan
N
%
3
0.9
9
2.6
338
96.6
350 100.0
Urbanisation
Urban
Rural
N
%
N
%
2
1.2
24
14.0
11
6.4
21
12.3
160
92.5
126
73.7
173 100.0
171 100.0
Total
N
%
29
4.2
41
5.9
624 89.9
694 100.0
National Lottery Influence On Business

The National Lottery started operating in 2000 in South Africa. Respondents
were asked in question 50 how expenditure on the National Lottery had affected the
total sales of their businesses during the preceding year. Table 81 shows the results to
this question. The vast majority of respondents (89.9 %) said the National Lottery had
no influence on their sales. A mere 5.9 % said it had resulted in a decrease in their sales
while 4.2 % report an increase in sales.
Table 82(A)
Sale of Lottery Tickets by Type of Business
Question 51: Do you sell lottery tickets at your business?
Type of business
N
%
N
%
1
0.3
1
0.6
332 99.7
166
99.4
333 100.0
167 100.0
Yes
No
Total
Hawker
N
%
2
1.4
144
98.6
146 100.0
Other
N
%
1
1.0
102
99.0
103 100.0
Total
N
%
5
0.7
744
99.3
749 100.0
Table 82(B)
Sale of Lottery Tickets by Urbanisation
Question 51: Do you sell lottery tickets at your business?
Urbanisation
Metropolitan
Urban
Rural
Total
N
%
N
%
N
%
N
%
1
0.3
3
1.6
1
0.5
5
0.7
380
99.7
179
98.4 185
99.5 744
99.3
381 100.0 182 100.0 186
100.0 749 100.0
Yes
No
Total
Table 82 shows that only 5 or 0.7 % of the 749 respondents who answered question 51 said they sell lottery tickets at their business.
Influence of Aids On Businesses
Question 52 of the questionnaire read as follows: Do you experience a reduction
in turnover as a result of the impact of AIDS on your clientele. Table 83(A) and (B)
show the results to this question. When comparing the negative influence of the National Lottery on businesses (5.9 % in table 81) to that of AIDS (11.5 % in table 83) it is
clear that the National Lottery is seen to have a far smaller negative impact than AIDS.
However, 88.5 % of the respondents indicated that AIDS had no influence on their
businesses. Table 83(B) shows that the influence of AIDS is greater in rural areas than
the other areas16.7 % of the rural respondents answered in the affirmative as against
14.5 % in the urban and 7.6 % in the metropolitan areas.
Table 83(A)
Reduction in Turnover as a Result of AIDS by Type of Business
Question 52: Do you experience a reduction in turnover as a result of the impact of AIDS on your
clientele?
Reduction
Yes
No
Total
Type of business
Spaza/tuck shop
N
%
44
13.2
289
86.8
333 100.0
Shebeen
N
%
16
9.6
150
90.4
166
100.0
Hawker
N
%
12
8.2
134
91.8
146
100.0
Other
N
%
14
13.7
88
86.3
102
100.0
Total
N
%
86
11.5
661
88.5
747
100.0
Table 83(B)
Reduction in Turnover as a Result of AIDS
by Urbanisation
Question 52: Do you experience a reduction in turnover as a result of the impact
of AIDS on your clientele?
Yes
No
Total
Metropolitan
N
%
29
7.6
353
92.4
382 100.0
Urban
N
%
26
14.5
153
85.5
179 100.0
Urbanisation
Rural
N
%
31
16.7
155
83.3
186 100.0
Total
N
%
86
11.5
661
88.5
747 100.0
Appendix A
Disaggregation of a 2000 SAM for South Africa
Appendix A
Disaggregation of a 2000 SAM for South Africa
Commodities/activities
1
11-13
Agriculture, forestry & fishing
2
Sugar cane growing
3
21
Coal mining
4
23
5 22, 24, 25, 29 Other mining
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
301-304
305-306
311-312
313-315
316
317
321-322
323
324-326
331-333
334
335-336
337
338
341
342
351
Food
Sugar refineries
Beverages & tobacco
Textiles
Wearing apparel
Footwear
Basic chemicals
Rubber products
Plastic products
Basic iron & steel
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
Commodities/activities
Television, radio & communication
equipment
374-376
381-383
384-387
391
Furniture
392
Other industries
41
42
Water supply
51
Building construction
52-53
Civil engineering & other construction
61-62
63
71
Transport & storage
72
Communication
81-82
Finance & insurance
83
Business services
93-98
Medical and other services
99
Other
352
353-355
356-359
361-366
371-373
Labour categories
Highly skilled
Skilled
Semi- and unskilled
Professional, semi-professional and technical occupations

Managerial, executive and administrative occupations
Certain transport occupations, e.g. pilot navigator
Clerical occupations
Sales occupations
Transport, delivery and communications occupations
Service occupations
Farmer, farm manager
Artisan, apprentice and related occupations
Production foreman, production supervisor
The rest
Appendix B
Bottler Survey
ECONOMIC IMPACT STUDY 2002

BOTTLER QUESTIONNAIRE
This questionnaire is concerned with budgeted financial data for the year ended 31 December
2002. To the extent that your financial year does not end on 31 December, please provide your
best estimates for the 12 months ended 31 December 2003. It is important that the data used in
the final analysis is internally consistent. Should you require any clarity or assistance with the
completion of this questionnaire, please contact [Name] from Coca-Cola at [phone number,
email]
Section 1 Sales
Please provide your expected turnover (excluding VAT and net of discounts) for the year ended
31 December 2002 as follows:
Rand
1.
Total turnover (excluding VAT and net of discounts) for the year
2.
3.
4.
5.
6.
Turnover (excluding VAT and net of discounts) by pack type

- Returnable glass
- Non returnable glass
- Can
- PET
Total by pack
7.
8.
9.
10.
11.
12.
13.
Turnover (excluding VAT and net of discounts) by channel

- Channel X please disclose
Total by channel

Page 1 of 6
Section 2 Production Inputs

How much will you spend on the following as it relates to production inputs (excluding VAT) :
Production Input Ex Labour
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Total Spend
Concentrate
Sugar
Water
Electricity *
Gas
PET
Crowns
Labels
Other packaging materials
Other material production input costs
please disclose
Administrative & other expenses
Totals
* Please include entire electricity bill here.

Page 2 of 6
Source
RSA
Non - RSA
Section 3 Labour Inputs

The following table requires you to estimate the number of staff working for you at the end of
December 2002.
Population Group
Africans / Blacks
Coloureds
Indians / Asians
Whites
Total
Total number of paid employees

Casual
Permanent Temporary
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
-----------------------------------------------------------------------------------------------------------The following table requires you to estimate the annual cost of the staff that was working for you
during the month of December 2002 only (please include gross salary, travel and entertainment
allowances and directors remuneration and all bonuses, other payroll related expenses and other
non-recurring items).
Population Group
26.
27.
28.
29.
Africans / Blacks
Coloureds
Indians / Asians
Whites
30.
Total
Total paid to employees

Permanent Temporary
Casual
------------------------------------------------------------------------------------------------------------

Page 3 of 6
Section 4 Transactions with Government

This table requests that you disclose all payments to Government Please disclose amounts
actually paid, not amounts accrued.
Total
31.
32.
33.
34.
35.
36.
SA Normal Tax
VAT
RSC
Customs & excise
Rates & Taxes
Other taxes please disclose
37.
Total taxes paid
Note : At this point, please take time to consider whether all Income Statement items, except
depreciation and deferred taxation, have been accounted for in the responses above. It is
imperative that all income and expense is captured to give an accurate reflection of the impact
on the economy.

Page 4 of 6
Section 5 Capital Expenditure

This section requires that you disclose all capital expenditure to be made by you in the current
and next two years. Please disclose all capital expenditure to be made regardless of whether the
assets are to be employed in RSA or not. Further, please only disclose capital expenditure made
from a South African source (i.e. Please exclude all imported items)
Capital Expenditure
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
Buildings
Company cars
Computer hardware
Computer software
Coolers
Crates
Forklifts
Office equipment
Other fountain / vending equipment
Other motor vehicles
Pallets
Plant & equipment
Returnable bottles
Other items please disclose
52.
Totals
2002
2003
2004
Thank you for the time taken to complete this study it is most appreciated.

Page 5 of 6
Appendix C
Informal Sector Survey
1
Questionnaire
No
(For office
use)
MOORE SCHOOL OF BUSINESS

UNIVERSITY OF SOUTH CAROLINA (USA)
AND
BUREAU OF MARKET RESEARCH
UNIVERSITY OF SOUTH AFRICA
2003 SURVEY OF INFORMAL BUSINESSES IN SOUTH AFRICA

FOR COCA-COLA, SOUTH AFRICA
DEFINITION:
COCA-COLA PRODUCTS INCLUDE THE FOLLOWING:

COCA-COLA, SPRITE AND FANTA
SCREENING QUESTION:
DO YOU PAY VAT
Make a cross
Yes
No
(Question solely for sampling purposes. If No, continue with interview)
NAME OF BUSINESS OR BUSINESS OWNER:

__________________________________________________
ADDRESS OF BUSINESS:
_____________________________________________________________________
TEL NO OF BUSINESS/RESPONDENT:
________________________________________________________
NAME OF RESPONDENT:
____________________________________________________________________
INTERVIEWER:
_______________________________________________________________
TEL NO OF INTERVIEWER:
____________________________________________________
DATE COMPLETED:
___________________________________________________________
2003 COCA-COLA SURVEY

OFFICE USE ONLY
1.
Name of town/area:
____________________________________________________________________
2.
Name of Province:
_____________________________________________________________________
A.
NATURE OF BUSINESS
3.
Type of business
4.
5.
Spaza/tuckshop
(b)
Shebeen
(c)
Hawker
(d)
Zinkies
(e)
Rural route distributor
(f)
Selling depot
(g)
Other (specify) ___________________________________________
12
13
Make one cross
(a)
Less than 6 months
(b)
Over 6 months less than 1 yr
(c)
Over 1 yr les than 2 yrs
(d)
Over 2 yrs less than 3 yrs
(e)
(f)
(g)
Over 7 yrs
What category of products do you sell
Make one cross
(a)
How long has this business been in operation?
14
Make one cross
(a)
Food products including beverages
(b)
Non-food products
(c)
Food including beverages and non-food products
(d)
Only beverages
(e)
Other (specify) ____________________________________________
15
OFFICE USE ONLY

6.
Indicate the five most important products to your business in terms of monthly turnover (sales) or
rank them in order of importance if turnover cannot be provided.
Product
Make a
cross
01
Cigarettes/tobacco
02
Parfin/candles
03
Maize meal
04
Groceries
05
Alcoholic beverages
06
Bread
07
Sugar
08
Milk
09
Soap
10
Meat
11
Fruit & Vegetables
12
Fish
13
14
Eggs
15
Monthly
turnover/sales of
product
(R)
Ranking
(Most important
product = 1)
Other (specify) __________________________

7.
To what extent do you agree/disagree with the following statements:

Make crosses
Strongly
Disagree
Neither
Agree
disagree
(a) Coca-Cola products are
1
2
3
4
affordable
(b) Coca-Cola products attract
1
2
3
4
people to my store
(c) When buyers purchase CocaCola products, they also buy
other goods
16
22
23
29
30
36
37
43
44
50
Strongly
agree
5
51
52
5
53
B.
BUYING OF COCA-COLA PRODUCTS
8.
How often do you purchase Coca-Cola products?
Make one cross
(a)
Daily
(b)
Weekly
(c)
Monthly
(d)
54
5
OFFICE USE ONLY
9.
How and how often do you get your Coca-Cola products? [Interviewer: cross all that apply]
(a)
Coca-Cola truck delivers
1
Daily
Once a month
Every other day
Twice a month
Once a week
Other (specify)
__________________________
(b)
1
55
Delivered by wholesaler. Name of wholesaler _______________________________

Daily
4
Once a month
Every other day
Twice a month
Once a week
Other (specify)
_________________________
56
58
59
60
(c)
1
Daily
Once a month
Every other day
Twice a month
Once a week
Other (specify)
_________________________
I fetch it from a retailer

Daily
Once a month
Every other day
Twice a month
Once a week
Other (specify)
________________________
(d)
1
10.
62
I fetch from a wholesaler. Name of wholesaler ____________________________
63
64
What do you do when you run out of Coca-Cola products (stocks)?
Make one cross

(a)
Wait for next delivery
Yes
1
No
2
(b)
Fetch stocks from the wholesaler/retailer
Yes
1
(c)
If yes, how many cases do you usually fetch? _______________________
(d)
How do you fetch it?
65
Make one cross
11.
(i)
Walk & carry
(ii)
Wheel barrow
(iii)
Rent a bakkie
(iv)
Own transport
(v)
Other (specify) _________________________
When people buy Coca-cola products, do they drink the product

(a) In or near the outlet
(b)
At home
No
2
66
67
68
Make one cross

1
2
3
4
5
69
Make one cross

1
2
70
6
C.
PHYSICAL CHARACTERISTICS OF BUSINESS
12.
State location of your business
OFFICE USE ONLY

Make one cross
13.
14.
15.
(a)
Formal residential area
(b)
Informal residential area
(c)
Hostel
(d)
Rural area
(e)
(f)
Other (specify) _____________________________________
Indicate what equipment the shop is equipped with:
1
2
3
4
5
71
Make one cross
(a)
Refrigerator
(b)
Deep-freezer
(c)
Telkom telephone
(d)
Cellphone
(e)
Shelves
(f)
Counter
(g)
Cash register
(h)
Other (specify) ____________________
(i)
Not applicable
Does having a fridge help you sell more Coca-Cola products

(a)
Yes
(b)
To some extent
(c)
No, it does not help at all
(d)
Not applicable
Type of shop accommodation:

(a)
Inside main house (% of house area ______________)
(b)
Outside building on some property
(c)
(d)
Metal container (railway/ship)
(e)
Shack
(f)
Zozo
(g)
(h)
Vehicle, cart, temporary stall in a market
(i)
(j)
Construction site
(k)
(l)
On the street
(m)
Other (specify) __________________________________________
72
Make one cross

1
2
3
73
Make one cross

01
02
03
04
05
06
07
08
09
10
11
12
13
74
75
7
16.
Does your shop have direct access to the following (on the same stand):
OFFICE USE ONLY
Make crosses
(a)
Electricity
(b)
Tap water
1 Yes
No
3 Not applicable
1 Yes
No
3 Not applicable
D.
EMPLOYMENT AND TRAINING
17.
How many employees, including owner/manager, work in the business

Black
M
Coloured
F
Indian
M
White
F
76
77
Total
F
Full-time
(78 88)
Part-time
(89 104)
Total
18.
Status of owner
Make crosses
(one per row)
(a) Is the owner engaged full or part-time in the business?
1 Full-time
2 Part-time
1 Male
2 Female
3 Asian
4 White
(b) Gender of owner

(c) Population group of
owner
(d) Nationality of owner
19.
1 Black
1 South African
2 Coloured
21.
106
107
2 Other (specify)
108
Work done by owner

Make
crosses
Work
20.
105
Management
Cashier
Stock clerk
Driver
Other (specify)
Who runs the business?
109
110
111
112
113
Make one cross
(a)
Owner
(b)
Manager
(c)
Employee
(d)
Family Member
(e)
Other (specify) ___________________________________________
Do you have any business training?
1
Yes
114
115
2
No
116
If YES, specify what type __________________________________________________________
117
8
22.
Do you think you need business training?
Yes
1
OFFICE USE ONLY

118
No
2
If YES, indicate your training needs and rank he three most important needs
where 1 = most needed, etc
(a) Management
01
119
121
(b) Bookkeeping
02
122
124
(c) Marketing
03
125
127
(d) Sales
04
128
130
(e) Credit control
05
131
133
(f) Computer skills
06
134
136
(g) Labour relations
07
137
139
(h) Customer/human relations
08
140
142
(i) Other (specify) __________________________________________
09
143
145
23.
How many of your employees are members of your family or household?
E.
FINANCING OF THE BUSINESS
24.
How much money was this business started with? R________________
25.
How long did it take you to find the funds to start the business?
146
147
148
152
Make one cross
26.
(a)
Less than 6 months
(b)
6-12 months
(c)
More than 12 months
(d)
Not applicable
1
2
3
153
Source of finance to start your business (Rate the three main sources in order of importance where
1 = most important)
Cost of finance
Cross
one or
more
Interest
(%)
Repayments
Amount
borrowed
Installment
(pm)
Repayment
period
(a) Savings (owner or

household members)
(b) Stokvel
154
155
157
(c) Loan from relative/friend
158
160
(d) Retrenchment payment
161
(e) Loan from bank
162
164
(f)
165
167
168
170
171
173
Loan/money from
government institution
(g) Loan from informal
organisation/lender
(h) Other (specify)
9
27.
Do you receive any government business development incentive?

Make one cross
Yes
OFFICE USE ONLY

No
If Yes, what kind of incentive is it? __________________________________________________
F.
EXPANSION AND GROWTH PLANS
28.
During the past 18 months has your business Make one cross
In terms of overall
turnover
29.
174
Make one cross

In terms of CocaCola products
Expanded
Contracted
175
176
177
178
What is your most important plan/intention for the development of your business in the next year?
Make one cross
30.
(a) Continue and maintain business at present size
01
(b) Switch to another line of business
02
(c) Move into another more profitable informal business
03
(d) Change informal business to formal business
04
(e) Stop business and take up wage job
05
(f) Give business to children and retire
06
(g) Sell business and retire
07
(h) Acquire new/better skills through training
08
(i) Employ somebody and retire
09
(j) Other (specify)
10
If expansion is planned: How are you going to finance the expansion?

Make
crosses
(a) Retained earnings from business
(b) Stokvel
(c) Loan from relative/friend
(d) Family savings
(e) Loan from bank
(f) Loan/money from government institution
(g) Loan from informal lender
(h) Other (specify)
1
2
3
4
5
6
7
8
179
10
G.
TURNOVER AND EXPENDITURE
31.
What was the turnover/sales of your business for the past month: R _____________________
32.
Operating costs: Approximately how much did you spend last month on the following?
OFFICE USE ONLY

180
184
(a) Purchase of merchandise
R________________
185
189
(b) Salary and benefits to owner
R ______________
190
193
(c) Salaries & benefits to employees
R ______________
194
197
(d) Electricity, water and sewer
R ______________
198
201
(e) Transport for business
R ______________
202
205
(f) Telephone/fax for business
R ______________
206
209
(g) Cleaning materials for business
R ______________
210
213
(h) Storage costs of merchandise
R ______________
214
217
(i) Security of business
R ______________
218
221
(j) Other operating costs, specify
R ______________
222
225
(k) Taxes
L______________
226
229
(l) Interest payments
R______________
230
233
1
H.
COCA-COLA PRODUCTS
33.
Did the Coca-Cola Company help with the following? [Interviewer: read and cross all that apply.]
(a) Product delivery

(b) Equipment support such as freezers, umbrellas, glasses
(c) Kiosks
(d) Push carts
(e) Ice boxes
(f) Trolleys
(g) Short-term credit
(h) Signage
(i) Other (specify) _______________________________
4
2
Yes
1
No
2
6
7
8
9
10
11
12
13
14
11
34.
On average, how many units of Coca-Cola products do you sell per day
OFFICE USE ONLY
Winter - when it is cold
Summer - when it is hot
Number
Number
Pack
2 L plastic bottle
15
18
500 ml plastic bottle
19
22
340 ml can
23
26
1,25 L glass bottle
27
30
500 ml glass bottle
31
34
450 ml can
35
38
1 L glass bottle
39
42
300 ml glass bottle
43
46
250 ml glass bottle
47
50
200 ml can
51
54
1,5 L bottle
55
58
35.
What is the cost and selling price per unit for the following products - NB: (a) Indicate whether cases,
bottles or cans under unit, (b) ask for invoice if available to verify, (c) Questions 35(a) (f) refer to
the difference brand names of Coca-Cola products.
35(a)
All Coca-Cola products
Cost
Pack
Unit
Selling price
Price
Unit
Price
2 L plastic bottle
59
64
65
70
340 ml can
71
76
1,25 L glass bottle
77
82
500 ml glass bottle
83
88
450 ml can
89
94
1 L glass bottle
95
100
300 ml glass bottle
101
106
250 ml glass bottle
107
112
200 ml can
113
118
1,5 L bottle
119
124
12
35(b)
Coca-Cola alone
OFFICE USE ONLY
Cost
Pack
Unit
35(c)
Selling price
Price
Unit
Price
2 L plastic bottle
125
130
131
136
340 ml can
137
142
1,25 L glass bottle
143
148
500 ml glass bottle
149
154
450 ml can
155
160
1 L glass bottle
161
166
300 ml glass bottle
167
172
250 ml glass bottle
173
178
200 ml can
179
184
1,5 L bottle
185
190
2 L plastic bottle
191
196
197
202
340 ml can
203
208
1,25 L glass bottle
209
214
500 ml glass bottle
215
220
450 ml can
221
226
1 L glass bottle
227
232
300 ml glass bottle
233
238
250 ml glass bottle
239
244
200 ml can
245
250
1,5 L bottle
251
256
Sprite products
Cost
Pack
Unit
Selling price
Price
Unit
Price
13
OFFICE USE ONLY
1
35(d)
Fanta products
4
5
Cost
Selling price
Pack
Unit
35(e)
Price
Unit
Price
2 L plastic bottle
11
12
17
340 ml can
18
23
1,25 L glass bottle
24
29
500 ml glass bottle
30
35
450 ml can
36
41
1 L glass bottle
42
47
300 ml glass bottle
48
53
250 ml glass bottle
54
59
200 ml can
60
65
1,5 L bottle
66
71
2 L plastic bottle
72
77
78
83
340 ml can
84
89
1,25 L glass bottle
90
95
500 ml glass bottle
96
101
450 ml can
102
107
1 L glass bottle
108
113
300 ml glass bottle
114
119
250 ml glass bottle
120
125
200 ml can
126
131
1,5 L bottle
132
137
Mineral/Water products
Cost
Pack
Unit
Selling price
Price
Unit
Price
14
I.
MARKETING AND ADVERTISING
36.
What type of marketing/advertising methods do you use to promote your business?
OFFICE USE ONLY
Cross all that apply

All methods used
Assistance by CC
(a) Signboard indicating location of business

(b) Brochures, flyers, pamphlets
(c) Word of mouth
(d) TV in shop for customers
(e) Music in shop for customers
(f) Posters
(g) Offering of specials and promotions
J.
BUSINESS PROBLEMS
37.
Indicate the three most important problems experienced by your business
138
139
140
141
142
143
144
145
146
147
148
149
150
151
(a) ___________________________________________________________________
152
154
(b) ___________________________________________________________________
155
157
(c) ___________________________________________________________________
158
160
K.
CRIME
38.
Were you a victim of crime during the past twelve months?

Make one cross
1 Yes
39.
161
2 No
If YES, list the type(s) of criminal activity (-ies) encountered.
(a)
(b)
Vandalism
(c)
Employee theft
(d)
Physical attacks
(e)
Extortion
(f)
Employees were subject to crime when arriving at/leaving from work
(g)
Other (specify) _______________________________________________
1
2
3
4
5
6
7
L.
ENVIRONMENTAL ISSUES
40.
For what purpose is packaging material of Coca-Cola products used after consumption (eg tins,
plastic, etc)
(a) Re-used (eg toys, water holders, etc)
1
(b) Collected for recycling
(c) Discarded
(d) Other (specify) ______________________________________________
2
3
4
162
163
164
165
166
167
168
169
170
171
172
15
41.
Is there a recycling depot/centre in your vicinity?

Make one ross
1 Yes
FOR OFFICE USE
2 No
M.
CUSTOMERS
42.
How many customers do you serve per week?

Make one cross
1
Less than 50
43.
2
50-100
3
More than 100
174
How much does a customer spend on average during a visit to your shop?
Make one cross
1
Less than R10
44.
2
R10-R25
3
More than R25
175
Out of every ten people that you serve, how many on average are male or female?
State 1 to 10
176
(a) Male
177
(b) Female
(c) Total
45.
10
Out of every ten people that you serve, how many on average are adults and children?
State 1 to 10
178
(a) Adults
179
(b) Children
(c) Total
46.
47.
48.
10
Give an estimate of the number of households or persons that regularly buy at this shop.
(a) Number of households: ____________________________
180
182
(b) Number of persons: _______________________________
183
185
(a) Number of households: ____________________________
186
188
(b) Number of persons: _______________________________
189
191
Give an estimate of the number of households or persons allowed to buy on credit.
State the frequency that accounts are settled:

49.
(a)
Weekly
(b)
Every two weeks
(c)
Every three weeks
(d)
Monthly
(e)
Longer than a month
(f)
No credit given
166
167
168
169
170
171
State total amount of credit outstanding (owing by all customers) at this moment:
R_____________________
172
175
16
N.
GENERAL
50.
Do you believe that the purchase of lottery tickets are the cause of a decline in your turnover?
FOR OFFICE USE
Make one cross

1
51.
Yes
176
2 No
Do you sell lottery tickets at your business?

Make one cross
1
52.
Yes
177
2 No
Do you experience a reduction in turnover as a result of the impact of AIDS on your clientele?
Make one cross
1
53.
Yes
178
2 No
What is the legal status of your business?

Make one cross
54.
(a)
Sole proprietorship
(b)
Partnership
(c)
Family business
(d)
Close corporation
(e)
Cooperative
(f)
Other (specify) _________________________________________
1
2
3
4
5
179
State the number of other retail businesses owned by the owner of this businesses?
Number: ______________________________
O.
SOCIODEMOGRAPHIC CHARACTERISTICS OF OWNER
55.
What was your job before you started this business

Shop assistant (seller)
Office worker
1
2
Housewife
Retired
Unemployed
Other (specify) _________________________________________
56.
180
181
Will you accept a job in the formal sector if offered today?

Make a cross
1
57.
Yes
182
2 No
How many people, including yourself, are in your household? ____________________________
183
184
17
58.
FOR OFFICE USE

185
Do any of your household members (including yourself) earn an

income outside this business?
1 Yes
2 No
If YES, tick the estimated total amount earned from all sources outside this business
Per month
59.
60.
Per week
Per day
Tick
(9)
R1 - R299
R1 - R69
R1 - R9,99
01
R300 - R799
R70 - R184
R10 - R24,99
02
R800 - R899
R185 - R207
R25 - R29,99
03
R900 - R999
R208 - R230
R30 - R33,99
04
R1 000 - R1 499
R231 - R345
R34 - R49,99
05
R1 500 - R1 999
R346 - R461
R50 - R66,99
06
R2 000 - R2 999
R462 - R692
R67 - R99,99
07
R3 000 - R4 999
R693 - R1 153
R100 - R166,99
08
R5 000 - R9 999
R1 154 - R2 307
R167 - R333,99
09
R10 000 - R19 999
R2 308 - R4 615
R334 - R666,99
10
R20 000 - R49 999
R4 616 - R11 538
R667 - R1 666,99
11
R50 000+
R11 539+
R1 667+
12
Reason for starting this business:

(a)
To increase income
(b)
Unemployed
(c)
Family business
(d)
To seize business opportunity (entrepreneurship)
(e)
To work from home
(f)
Other (specify)
What is your educational level?

(a)
No formal schooling
(b)
Primary (Grade 1-7)
(c)
Secondary (Grade 8 11)
(d)
Matric (Grade 12)
(e)
Tertiary (Post matric)
186
187
Make a cross
1
2
3
4
5
6
188
Mark one
1
2
3
4
5
189
18
FOR OFFICE USE
61.
Indicate number of hours open each day of the week:

Make crosses
Number of hours open
Day
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday
62.
not
open
1-8
9-10
11-12
13-14
15-16
17-18
18+
01
11
21
31
41
51
61
71
02
12
22
32
42
52
62
72
03
13
23
33
43
53
63
73
04
14
24
34
44
54
64
74
05
15
25
35
45
55
65
75
06
16
26
36
46
56
66
76
07
17
27
37
47
57
67
77
190
191
192
193
194
195
196
197
198
199
200
201
202
203
Did you have to close your shop temporarily during the past 12 months because Coca-Cola products
were not available?
Make a cross
1 Yes
2 No
204

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The Economic Impact of The Coca-Cola System

The Economic Impact of The Coca-Cola System

The Coca-Cola bottling system directly employed 9,740 workers in 2003.

In particular, the employment supported by the informal trade sectors activity

Methods and Terms

Economic Impact of The Coca-Cola System on South Africa, iii

Economic Impact of The Coca-Cola System on South Africa, iv

Economic Impact of The Coca-Cola System on South Africa, v

The Economic Impact of The Coca-Cola System

EXECUTIVE SUMMARY .......................................................................................... i

TABLE OF CONTENTS .......................................................................................... vi

CHAPTER 2: COCA-COLA SOUTH AFRICA: COMPETITIVENESS

Macroeconomic Conditions ......................................................................................... 4

The Coca-Cola Systems Upstream and Downstream Network .................... 6

The Beverage Cluster ....................................................................................................... 7

Related and Supporting Industries.................................................................................. 12

CHAPTER 3: THE ECONOMIC IMPACT OF THE COCA-COLA SYSTEM ....................

Overall Economic Impact ............................................................................................ 24

Economic Impact of The Coca-Cola System on South Africa, vii

CHAPTER 4: RESULTS OF THE SURVEY ...........................................................................

Characteristics of Businesses .................................................................................... 38

Table 9(A). Distribution of Business by Time in Operation and

Role of The Coca-Cola Company ............................................................................... 44

Table 22(A). Frequency of Deliveries by Wholesaler and Type of Business ............ 50

Physical Characteristics of Business ...................................................................... 56

Table 32(A). Percentage of Respondents With Equipment Installed by

Features of Ownership and Management ............................................................ 67

Table 46(A). Full- or Part-time Engagement of Owner in the Business by

Financing of Business ................................................................................................... 72

Table 58(A). Government Business Development Incentive by

Financial Performance ................................................................................................. 81

Coca-Cola Products ........................................................................................................ 83

Table 68(A). Average Number of Products Sold During Summer by Type of

Marketing and Advertising ......................................................................................... 91

Business Problems ......................................................................................................... 92

Table 73(A). Victim of Crime During the Past Twelve Months by

Environmental Issues ................................................................................................... 94

Table 78(A). Distribution of Businesses by Customer Spending and

National Lottery Influence on Business .............................................................. 100

Influence of AIDS on Businesses ............................................................................ 101

Appendix A: Disaggregation of a 2000 SAM for South Africa

Economic Impact of The Coca-Cola System on South Africa, xv

The Economic Impact of The Coca-Cola System

Above all, an exhaustive effort was undertaken to calculate the economic

Chapter 2 explains the Coca-Cola enterprise system, or beverage cluster, in detail.

Chapter 4 presents the findings of the informal trade sector survey.

Economic Impact of The Coca-Cola System on South Africa, 3

The Economic Impact of The Coca-Cola System

Economic Impact of The Coca-Cola System on South Africa, 4

institutions, mining multinationals, and manufacturersincluding those in beverages

with 36 percent of total employment.

The Coca-Cola Systems Upstream and Downstream Network

Figure 1. Coca-Cola Production and Distribution

Transport & Other

Advertising & Other

Local business services include financial institutions, advertising agencies, sign

The Beverage Cluster

Many technikons are involved in collaborative industry-directed research programs, and

Economic Impact of The Coca-Cola System on South Africa, 15

The Economic Impact of The Coca-Cola System

Impact Analysis Methodology

Direct Economic Effects