ABSTRACT

Alcohol is the most widely used and misused substance in the world. For many decades it was perceived as a moral weakness but in recent times, alcohol use and misuse has begun to be viewed as a disease. Attitudes and moral notion of alcoholism still prevail, resulting in missed diagnosis and lack of treatment of the affected persons.  The impact of excessive alcohol use in human health and well-being is substantial and no one is immune from the complete range of medical, social, family, legal and economic problems which are brought by the uncontrolled use of alcohol. However, marketing of alcohol and tobacco has contributed to increased health related problems; especially in developing countries. Due to this knowledge the government of Kenya came up with the alcoholic drinks control Act 2010 to regulate sale, consumption, promotion and licensing of alcohol sale among entrepreneurs. This study aims to assess the effect of provision in Alcoholic drinks control Act 2010 and assess their effect on bar ventures profitability. To achieve this study will focus on effects of ADCA 2010 on volume of sales, levels of alcohols consumption and the effect of promotion act among bar ventures in Nairobi County. The will adopt exploratory design to collect data with the target population comprising of the bars business entrepreneurs in Nairobi county. Data will be collected from a sample size of 150 entrepreneurs by use of structured questionnaires administered through drop and pick method. Quantitative analysis will be applied on the findings to come up with conclusions and recommendations for the study. Descriptive statistics will be used to analyze and present the collected findings and the project results.

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

The alcohol industry is large, complex and increasingly international in ownership. It has the power to influence and guide national, state and local alcohol control policies. The alcohol industry is effective in influencing media and decision makers’ perception on alcohol, alcohol consumption and alcohol problems. Alcohol consumption is an individual choice and alcohol control policies need to focus on punishing only irresponsible individual drinkers. The alcohol industry produces a legal widely consumed drug that is dominated by few producers and requires advertising, marketing, political campaign contributions and sophisticated lobbying tactics to create and maintain a favorable environment for economic and political interests.

According to American Medical Association (2004) in the United States, alcoholic beverages generate over $137 billion in sales annually. The industry is a powerful multinational business complex and constitutes of producers of wine, beer and distilled spirits, distributors, wholesalers, hospitality and entertainment industries. Additional business sectors earn substantial profits from the sale and promotion of alcohol such as the media, advertising industry and gas stations.

Greene (2007) and AMA (2007) maintain that alcohol industry maintains great political influence and connections to local communities through its presence in every community. Some community organizations turn to the alcohol industry for donations and sponsorships. The alcohol industry is subject to government regulations that affect distribution, labeling, advertising, credit, container characteristics, and alcoholic content and tax rates. The alcoholic industry operates under a license-to-sell system where one is required to have a state issued license in order to sell alcohol. Most licenses are issued by state agencies. The industry is well established in the global economy. The economic activities involved in production and distribution of alcohol generate employment and act as a source of tax revenue for governments.

In developing countries, production and sale of alcohol has been important in that it has created jobs, generated revenue for governments, created a market for local goods and services and supported the hospitality and retail industry. Many of the suppliers and distributors are privately-owned small and medium enterprises that employ people thus empowering communities where they operate (International center for Alcohol Policies, 2006).

The alcohol business in Kenya is a profitable one with a considerable number of Kenyans involved in consumption of alcohol on a daily basis. A large number of entrepreneurs have ventured into the alcohol business among them being bar owners, manufacturers, importers, distributors, bottlers and many others. According to National Agency for the Campaign against Drug Abuse Authority (2011) there are sixty eight approved manufactures/ importers of alcoholic drinks in Kenya. Three hundred and thirty one alcoholic brands are approved for sale in Kenya. Nairobi is home to a variety of bars, nightclubs and pubs that are found all over the area.

The government of Kenya has seen the need of coming up with policies and regulations that govern bar business in Kenya. Policies and regulations governing the sale of alcohol are found under the Alcoholic drinks control Act 2010 (KLR, 2012). According to the Act bar owners are required by the government to acquire a liquor license before commencing the operations of their business. The alcoholic drinks control Act touches on various aspects of the sale of alcohol such as when alcohol can be served; where it can be served; what containers alcohol can be served in; how much alcohol can be served at a time; to whom alcohol can be served and the costs of alcohol. The policies under the Act regulate both consumption and sale of alcohol related products in Kenya. The study will evaluate how the Act has affected the different aspects of the alcohol industry as related to profitability. This study seeks to evaluate the impact of the policy on the entrepreneurs in the bar and restaurant industry

1.2 Research Problem

Several studies have been conducted to assess negative effects of alcohol on community health, economic growth, domestic violence, and proliferation of illegal drinks. Despite policies and other legal requirement being imposed to entrepreneurs doing alcohol related business, very scanty research has been conducted to evaluate the impact of such policies and legal requirements on entrepreneurship success in the bar and restaurant industry. The bar and restaurant industry largely depends on safety of the drinks sold, the time when the drinks are sold, and the legality of the drinks sold. Customer satisfaction is a critical factor to the success of a bar business. Therefore, any law that moderates the trends on when, where, how, and who consumes alcohol greatly affects profitability, entry strategy, and the sustainability of any alcoholic venture. This study aims to assess the impact of Alcoholic drinks control Act 2010 on alcoholic venture profitability among bar owners and operators in Nairobi County.

1.3 Purpose of the Study

The study aims to examine selected provisions in the Alcoholic drinks control Act 2010 and reflect how they affect profitability among bar owners and operators. The study will examine the rate of awareness of these policies and regulations and observance of the Act by bar owners and operators.

1.4 Main Objective

The main aim of this study is to assess effect of provision in Alcoholic drinks control Act 2010 on bar ventures profitability.

1.4.1 Specific Objectives

The specific objectives of the study include:

1. To determine extent to which ADCA (2010) affects volume of sales on the alcoholic beverages among bar ventures in Nairobi county
2. To describe effect of ADCA (2010) on market strategies among bar vendors in Nairobi county
3. To establish extent to which ADCA (2010) affects alcohols consumption in Nairobi county

1.5 Scope of the Study

This study will focus on alcoholic drinks control Act 2010 and reflect how it has affected profitability among bar owners and operators. The study will further focus on its effect on volume of sales, on promotion techniques and on consumption. Given that the act was confirmed in 2010 the study will assess its effect since 2011 and 2014. Further, the study will focus on Kasarani District and only bar owners and operators will be interviewed.

1.6 Significance of the study

The study will be significant to relevant ministry, body of researchers, and bar owners and operators in Kenya. The results of the study will provide the government and relevant bodies with insight on the effectiveness of the implementation of the Alcoholic Drinks Control Act and is effects on the sale of alcohol in the country.

1.7 Limitations

The study will only focus on bar owners and operators. Other entrepreneurs involved in the sale of alcohol from other businesses such as hotels and members clubs will not be interviewed. Due to budgetary and time constraints, the study will only focus on a small representative sample.

 

 

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

This chapter presents discussions and researches previously conducted on alcohol policies and their impacts. The Alcoholic Drinks Control Act, 2010 of Kenya has been widely discussed and its impacts after enactment stated.

2.2 Alcohol policies and laws

Alcohol policies categorized into: policies that lead to reduction of drinking and driving; policies that support education, public awareness, communication; training; policies that regulate the alcohol market; policies that support reduction of harm in drinking and policies that support interventions for individuals. Progress has been made in scientific understanding of the relationship between alcohol policies and alcohol consumption and is effects. Alcohol policies are common around the world and include policies such as drinking and driving policies that comprise random breath testing, lowered blood alcohol concentration levels and license suspension. Policies that support education, communication, training and public awareness have low impacts due to their lack of effectiveness. There is clear evidence of the effectiveness of policies that regulate the alcohol market in reducing harm. Such policies include taxation and limiting the hours and days of sale and raising the minimum drinking age.

2.2.1 Alcohol policies and public health

Research conducted over the years, points to the fact that increasing access to alcohol leads to an increase in consumption and as a result increase in alcohol related health and social harm. Alcohol policies are formulated with a lot of consideration placed on public health. Alcohol consumption has a clear impact on public health. In the UK, clear efforts have been made toward enhancing public health through restructuring alcohol policies. Under the Police Reform and Social Responsibility Act of 2011, the government made changes to the licensing legislation by giving health authorities a role in the licensing process. Responsibility for engagement in licensing now falls under the Director of Public Health (DPH). Local health bodies have been added to the list of authorities responsible for enhancing the licensing Act in the U.K. The other bodies include the police, fire service, health and safety, environmental health, child protection services, trading standards, planning, the licensing authority and regional health authority (Local Government Association, 2013).

Local government sectors have the power to influence many social determinants of health. Alcohol related problems are caused by a range of social, economic and political determinants that are affected by policies formulated in non-health sectors. Promotion of health among the public calls for health professionals to work together with non-health sectors to negotiate changes in policy that enhance public health and well-being. Non-health sectors have common concerns regarding alcohol-related harm such as crime, disorder and lost economic productivity thus presenting an opportunity for incorporating health goals into alcohol control policies. In England and Wales, local governments are directly responsible for controlling provision of alcohol through licensing, planning and trading standards. Reviews on national guidelines consistently stress on the health importance of reducing affordability and the physical availability of alcohol. Other measures include reducing alcohol outlet density, operating days and time, increased taxation and minimum unit pricing. The U.K. government’s 2012 alcohol strategy included commitment to introduction of national minimum unit pricing and health licensing objective for local alcohol policy.

In Kenya, the Alcoholic Drinks Control Act takes into account the health of both consumers of alcoholic drinks and the general public. Health of the public is part of the object and purpose of the Act. Section 67 of the Act talks about the integration of alcohol matters into healthcare. It states that the relevant agency should work alongside the ministry responsible for health to ensure that alcoholic drink use education and information dissemination must form part of healthcare services by healthcare providers. The government should provide training for the healthcare providers to impart skills for proper information dissemination and education on alcohol consumption.

2.2.2 Licensing in the U.K.

In the U.K, the Licensing Act 2003 establishes four categories of activities that require licensing. These activities include: the sale by retail of alcohol; the supply of alcohol by or on behalf of a club; the provision of regulated entertainment and the provision of late night refreshment. Application of a license is made to a licensing authority. The objectives of the licensing act in the U.K include the prevention of crime and disorder; public safety; prevention of public nuisance and protection of children from harm (Local Government Association, 2013). Licensing decisions are determined by: the local licensing policy statement; written representations by authorities and the licensing sub-committee. Each authority indicates its plans on meeting licensing objectives by publishing a Statement of Licensing Policy every five years. Each policy measure relates to at least one licensing objective.

Figure 2.1: Licensing process in England

In addition to the licensing objectives in England, Scotland also has a fifth objective, which is the protection and improvement of health. The fifth objective is set out in the Licensing (Scotland) Act of 2005 that was implemented in 2009 (Martineau, Graff, Mitchell & Lock, 2013).

2.3 Alcoholic Drinks Control Act 2010, Kenya

The Alcoholic Drinks Control Act, 2010 came into operation on 22^nd November 2010 repealing the Liquor Licensing Act, Cap 121 and the Chang’aa Prohibition Act, Cap 70. One of the many reasons for its enactment included a study by National Agency for the Campaign against Drug Abuse Authority (NACADA) in 2007. The study revealed that nationally, 13% of the population consumes alcohol and that illicit brews are consumed by over 15% of persons between the age of 15 and 64 years. The study also concluded that alcohol abuse is responsible for a range of harmful effects such as diminishing health, traffic accidents, exposure to HIV and STIs and social disharmony. It was noted that there had been a significant increase in number of alcoholic drinks selling outlets especially in urban residential areas, near learning institutions, in supermarket and rural villages. The study also discovered that there had been easy access to alcoholic drinks by persons under the age of eighteen. There had also been an increase in adulterated alcoholic drinks and illicit brews that led to death and injuries. There had been aggressive marketing and promotion of alcoholic drinks especially with messages targeting young people and sponsorships of events for persons below the age of 18 years by the alcoholic industry.

The Alcoholic Drinks Control Act 2010 was created to serve the purpose of controlling the production, sale, consumption, distribution, and promotion of alcoholic drinks. The Act also provides for effective licensing process for the manufacture and sale of alcoholic drinks. The Act contains measures to deal with product safety, access and exposure to alcoholic drinks by people below 18 years, drinking environment and control of intoxication.

Under section 3 of the Act the object and purpose of the Act is: protecting the health of the individual from dangers of excessive consumption; protecting the consumer from misleading inducements and informing them of risks concerning excessive consumption; protecting the health of persons under the eighteen years by preventing access to alcohol; educating the public on the harmful health, economic and social consequences of consumption of alcohol; implementing measures on curbing illicit trade, manufacturing and counterfeiting; providing treatment and rehabilitation programs for those addicted and promoting research and dissemination of information on the effects of alcoholic drink consumption (Alcoholic Drinks Control Act of 2010, 2012).

2.3.1 Licensing requirements

The Act covers provisions for licensing of premises that engage in the sale of alcoholic drinks. Under section 8, the power of licensing is vested in the hands of the District Alcoholic Drinks Regulation Committee consisting of the District Commissioner; District Medical Officer of Health; Officer Commanding Police Division; one person nominated by every local authority in the District; three residents of the district, appointed by the minister; one person designated by the relevant agency and the authorized officers in charge of the district. According to the Act, the function of this committee is to issue licenses, perform functions allocated by the minister and make inspection of premises that sell alcoholic drinks (Alcoholic Drinks Control Act of 2010, 2012).

Section 9 of the Act provides for the policies on application of licenses. The application for a license is written in a prescribed form to the District Committee in the district where the premises will be situated alongside a prescribed fee. Under the act, the application must contain the nature and orientation of the premises and a disclosure as to whether the applicant has been previously convicted of an offence under the Act. The District Committee, within twenty-one days, prepares a notice setting forth all the names of the applicants; types of licenses applied for; the premises of which the licenses are applied for and the time, date and place of the meeting. Copies of the notice are published in the Kenya Gazette and at the office of the District Commissioner for a time frame of not less than twenty-one consecutive days; posted in a conspicuous place; sent to the Commissioner of Police; sent to the medical officer of health of the district and also sent to the local authority of the area in which the premises is to be located. The Commissioner of Police; the medical officer of health and an officer from the local authority, before the hearing of any application, report to the District Committee on all matters relevant to the consideration of an application. According to the Act, objection to an application may be made by any person and written to the Secretary to the District Committee. The District Committee must inform the applicant the nature of the objection and postpone the hearing for a minimum of seven days to allow the applicant to reply. Under the Act, every applicant must appear in person or by an advocate before the District Committee and must convince the committee of the need for the grant of the license. The District Committee ensures that the premises is suitable according to the nature of the license being sought and conforms to the prescribed requirements of the occupational health and safety regulations. The committee also ensures that the applicant possesses the infrastructure and equipment necessary for the business applied for and that the premise has a sufficient number of competent staff (Alcoholic Drinks Control Act of 2010, 2012).

Section 10 contains the provisions for the grant of a license. The District Committee grants a license when there is no objection to the application upon payment of the required fee. The District Committee may also reject the application and reasons must be provided and the applicant informed accordingly within thirty days. The rejected applicant is allowed to resubmit a revised application within six months of the date of notification. The District Committee puts into consideration a revised application within three months and issues a license if satisfied with the revised application. The grant of a license is published in the Kenya Gazette (Alcoholic Drinks Control Act of 2010, 2012).

Section 12 presents the conditions within which a new license may be granted for the sale of alcoholic drinks that are to be consumed at the premises. The conditions include the fact that it must be in public interest for the license to be granted for the sale of alcoholic drinks in the particular locality in which the application was made. The license must be within the permitted number set by the law according to the population density per square kilometer of the area where the premises is to be established. The license is not ranted to premises that are built within any institution of basic education or any residential area. The premises must be located at least three hundred meters away from any learning institutions with persons under the age of eighteen years old. The premises must be in good repair, clean and wholesome condition and provided with adequate sanitary arrangements (Alcoholic Drinks Control Act of 2010, 2012).

Section 13 states the causes for the denial of a license. A license cannot be granted to an applicant who has failed to convince the District Committee of his good conduct with regards to the Act. A license may also not be granted to an applicant convicted of selling an alcoholic drink without proper licensing or has committed an offence against any law relating to distillation, manufacturing, sale or use of industrial alcohol.  The license may also not be granted to applicants who have been convicted of an offence and sentenced to imprisonment without the option of a fine for a period in excess of six months. Licenses are denied to persons under the age of eighteen years and individuals considered undischarged bankrupts (Alcoholic Drinks Control Act of 2010, 2012).

Section 14 provides that the grant, renewal or transfer of a license shall be subject to payment of prescribed fee; expire at the end of twelve months from date of issue; specify in the license the hours that sale of alcohol is permitted. An applicant must wait six months before applying for a second time after the refusal or cancellation of a license (Alcoholic Drinks Control Act of 2010, 2012).

According to section 15 an applicant may appeal for a new license that has been rejected or for a renewal or transfer of a license that has been cancelled within twenty-one days (Alcoholic Drinks Control Act of 2010, 2012).

Section 18 states that where a licensee sells, leases or otherwise disposes of the business specified in the license, he might apply to the District Committee in writing for the transfer of the license. The District Committee may grant the transfer of the license if it deems it fit (Alcoholic Drinks Control Act of 2010, 2012).

According to section 19 a licensing court may refuse to renew an existing license when satisfied that: the licensee is not fit to hold the license; the licensee has been convicted of an offence under an Act regulating the sale of alcohol; the licensee has previously been convicted of an offense and sentenced to imprisonment without the option of a fine for a period in excess of six months; the business is conducted in an improper manner; conditions of the license have not been fulfilled and the premises relating to the license is not in proper repair and is lacking sanitary conditions (Alcoholic Drinks Control Act of 2010, 2012).

Section 20 states that every license must be conspicuously displayed on the premises to which it relates. Section 21 provides for the regulations on the employment for sale of alcoholic drinks. Under the section, the licensee is not allowed to employ a person under the age of eighteen or a person convicted of an offence under the Act. The licensee is also not allowed to permit any other person to manage the day-to-day business of the premises except where there is a written consent of the District Committee (Alcoholic Drinks Control Act of 2010, 2012).

2.3.2 Legal requirements

Section 22 deals with drunken behavior. It gives the licensee power to refuse admission or expel from the premises any person who is drunk and disorderly, violent or whose presence would subject the licensee to a penalty under the Act. The Act allows for a police officer to assist in expelling of a drunk and disorderly client from the premises (Alcoholic Drinks Control Act of 2010, 2012).

According to section 23, a licensee cannot sue a client for failure of payment of an alcoholic drink delivered on the premises unless the drink was sold for consumption with a meal at the time of sale or when the drink was sold to lodger on the premises (Alcoholic Drinks Control Act of 2010, 2012).

Section 24 prohibits the sale and access of persons under the age of eighteen years to areas where alcoholic drinks are manufactured, stored or consumed.  Section 28 stipulates that age may be verified using a national identity card issued by the Republic of Kenya or a passport issued by any country (Alcoholic Drinks Control Act of 2010, 2012).

Under section 30, alcoholic drinks cannot be sold by way of an automatic vending machine. Section 31 prohibits the sale, manufacture, packaging or distribution of alcoholic drinks in sachets or amounts less than 250 milliliters (Alcoholic Drinks Control Act of 2010, 2012).

Section 32 provides the information that must be included on the packages of alcoholic drinks. The package must bear a statement as to its constituents and have at least two of the health warning messages in English or Kiswahili. The statement and health warning must comprise not less than 30% of the total surface area of the package (Alcoholic Drinks Control Act of 2010, 2012).

Section 33 allows a police officer to arrest without a warrant and bring before a magistrate any person found drunk and disorderly in or near a street, road, licensed premises or other public place without unreasonable delay. Section 38 prohibits the sale of an alcoholic drink that has been adulterated or diluted (Alcoholic Drinks Control Act of 2010, 2012).

Section 43 prohibits promotion of an alcoholic drink by any means that is false, misleading or deceptive or that is likely to create an erroneous impression about the characteristics, health effects or social effects of the alcoholic drink (Alcoholic Drinks Control Act of 2010, 2012).

2.4 Major Implications of the Alcoholic Drinks Control Act, 2010

The Alcohol Drinks Control Act, 2010 has had far reaching effects on the alcoholic industry in Kenya. First, all alcoholic drinks outlets that were near schools were not given licenses thus reducing the underage drinking by school goers. Since the enactment of the law, there has been a notable reduction in the number of alcohol related deaths and injuries. Secondly, there has been control of the purchase of alcohol from supermarkets where storeowners have moved to comply with the regulations by establishing separate outlets within the supermarket for the sale of alcohol, which has locked out customers under the age of eighteen from purchasing alcohol. Thirdly, there has been a complete stop of aggressive marketing and promotion of alcoholic drinks with messages targeting persons less than 18 years and sponsoring of events for young people with alcoholic drinks. Fourthly, the law sought to reduce negative health, social and economic impacts resulting from excessive consumption of alcoholic drinks. Additionally, the law also affected the quality of alcoholic drinks being consumed. Most consumers are now aware of the need to consume safe alcoholic drinks from reputable companies. The quality of alcoholic drinks leads to customer satisfaction, brand loyalty and increased customer tolerance to service failures (Mwende, Juma, & Mathooko, 2013).

The restriction of operating hours in the sale of alcoholic drinks has been speculated to be counter-productive. In the United States, prohibition was a disaster in the 1920s and 30s because it led to binge drinking. Section 12 of the Act that prohibits the grant of a new license to be consumed on the premises unless the District Committee is convinced that the premises is located at least three hundred meters away from any learning institution for persons under 18 years brought concerns to the hospitality industry. The concerns are because of the presence of responsible tourism and entertainment establishments that are within 300 meters of educational institutions that have no effect on social and moral values and the quality of education in the learning institutions. There is also no significant difference between a bar that is located 290 meters away from a learning institution and one located 320 meters away (ICPAK).

Section 23 of the Act states that debt from sale of alcoholic drinks cannot be recovered when delivered for consumption on the premises where it was sold unless sold for consumption with a meal provided at the time of sale or the person sold to is a lodger at the premises. The industry is concerned on grounds that members’ only clubs may no longer allow members to sign for a bill because legal action cannot be taken against members when they fail to pay for the alcoholic drinks (ICPAK).

Section 50 of the Act states that the minister shall appoint persons to be authorized officers. The minister shall issue a certificate of appointment to every person appointed. The officers who are deemed according to the Act to be authorized officers include Public Health officers and any person upon whom any written law vests functions of the maintenance of law and order. Public health officers who have not undergone training on the alcohol law, police officers and city council officers are free to walk into premises and harass business people and customers (ICPAK).

Section 38 states that no one can sell, offer for sale or keep for sale any alcoholic drink that has been in any way adulterated or diluted and any non-alcoholic drink that has in any way been adulterated with alcohol. Persons found going against this law are committing an offence punishable by a fine not exceeding ten million Kenya shillings or imprisonment for a term not exceeding ten years or both. Mixing both alcoholic and non-alcoholic drinks makes cocktails. There are meals that are prepared with alcohol as part of their ingredients. The wording of the law was made in a confusing manner since the intention was to protect the public from illicit alcohol mixed with harmful substances (ICPAK).

Section 24 of the Act states that no person holding a license to manufacture, store or consume alcoholic drinks shall allow persons under the age of 18 to gain access to an area where alcohol is manufactured stored or consumed. The section seeks to fill in the gap of responsible parenting that exists in some families

But in the process punishes business people and consumers of alcoholic drinks. Kenya is a leisure and family holiday destination with a growing entertainment sector that employs hundreds of youth. Restaurants serving families will not be allowed to sell or store alcohol whether customers have children or not. Min bars in rooms will be removed or only stocked with alcohol once a room is established not to be having children. Serving of alcoholic drinks in flight or on cruises will not be allowed as long as there are persons less than 18 years on the flight or cruise. Access to children is also difficult to control at outside catering events, champagne breakfasts, bush dinners and picnics.

2.5 Theoretical Review

Scholars have put forward several theories to explain entrepreneurship. The theories are based on economics, sociology, psychology, anthropology and management.

2.5.1 Economic entrepreneurship theories

The economic entrepreneurship theory is deeply rooted in the classical and neoclassical theories of economics. The theories assess the economic factors that enhance entrepreneurial behavior.

Classical theory: This theory was the result of the British industrial revolution that took place from1700 to 1830. It describes the role of an entrepreneur in production and distribution of goods in a competitive market place. It is characterized by three modes of production: land, capital and labor (Murphy, Liao & Welsch, 2006).

Neo-classical theory: It emerged from the classical theory and indicates that economics is related to instances of pure exchange, reflect an optimal ratio, and occurs in an economic system that was closed. Exchange and diminishing marginal utility enabled entrepreneurship in the neoclassical movement (Murphy, Liao & Welsch, 2006).

Austrian Market Process (AMP): The Austrian Market Process was developed from the neoclassical theory. Joseph Aloi Schumpeter influenced the model in 1934. It was based on human action in an economy of knowledge. Schumpeter described entrepreneurship as the driver of market-based systems. The purpose of an enterprise was to come up with a new creation that would result in the motion of the market economy. Knowledge is transferred through a market system, which leads to innovation thus satisfying market needs. Economy is improved through knowledge such as when an entrepreneur creates new goods or services are comes up with new efficient ways of creating them. The movement holds that when entrepreneurs use knowledge that has never been used before, they generate value (Murphy, Liao & Welsch, 2006). The AMP is based on three conceptualizations the first being that opportunities emerge for given market actors as others overlook opportunities. The second was that being alert to profit-making opportunities gives entrepreneurs an entrepreneurial advantage. The third was that ownership is distinct from entrepreneurship. The process of entrepreneurship does not require the ownership of resources. In entrepreneurship, every opportunity is unique thus activities done in the past cannot be used to describe activities in the future (Simpeh, 2011).

2.5.2 Psychological Entrepreneurship Theories

Psychological entrepreneurship theories are based on the individual. They emphasize personal characteristics that define entrepreneurship.

Personality Traits Theory: According to Coon (2004), personality trait refers to the stable qualities that an individual exhibits in most situations. The theory holds that there are inborn qualities that make one an entrepreneur. Entrepreneurs tend to be opportunity driven, creative and innovative and exhibit high levels of management skills and business knowledge. Entrepreneurs are also known to be optimistic, emotionally resilient, hard workers, committed, have the desire to excel, dissatisfied with the status quo, desire improvement, transformational and are lifelong learners. Entrepreneurs tend to believe that they can make a difference, have integrity and are visionary (Simpeh, 2011).

Locus of Control: The concept of locus of control is an important aspect of personality and was introduced by Julian Rotter in the 1950’s. It is an individual’s perception of the causes of events in their lives. It is the belief about whether the outcomes of our actions are dependent on what we do or on events out of our control. The entrepreneur’s success comes from his/her own abilities (internal locus of control) and also support from outside, that is, external locus of control (Simpeh, 2011).

Need for Achievement theory: The need for achievement theory was formulated by McClelland in 1961 and explains that human beings possess an need to succeed, accomplish and excel. Their drive comes from the need to succeed. There exists a relationship between achievement motivation and entrepreneurship. The need for achievement, risk taking and innovativeness and tolerance for ambiguity have a positive significant influence on entrepreneurship (Simpeh, 2011).

2.5.3 Sociological Entrepreneurship Theory

The sociological entrepreneurship theory focuses on the social context or society. There are four social contexts that relate to entrepreneurial opportunity. The first is social networks where the focus is on building social relationships that promote trust.  The entrepreneur should not take advantage of people for his own success rather success should come from keeping faith with people. The second is the life course stage that involves analyzing life situations and characteristics of individuals who are in entrepreneurship. The experiences of people influence their thoughts and actions making them desire to do meaningful things in their lives. The third is the ethnic identification where one’s social background can influence whether they will become entrepreneurs. According to the theory, the social background determines how far one will go. Marginalized groups may surpass all obstacles and strive for excellence because of their disadvantaged background so as to improve their lives. The fourth is the population ecology that holds that environmental factors play an important role in the survival of a business. The political environment, government legislation, customers, employees and competition make up the environmental factors that influence survival of a new venture or the success of an entrepreneur (Simpeh, 2011).

2.5.4 Anthropological Entrepreneurship Theory

Anthropology is the study of the origin, development, beliefs and customs of a community.it involves the culture of a community. The theory states that for one to become successful in initiating a venture, the social and cultural contexts must be considered. Emphasis is placed on the cultural entrepreneurship model that states that a new venture is created through the influence of one’s culture. Cultural practices lead to entrepreneurial attitudes that lead to venture creation behavior. Individual ethnicity affects attitude and behavior as well as entrepreneurial behavior differences (Simpeh, 2011).

2.5.5 Opportunity-Based Entrepreneurship Theory

According to the opportunity-based entrepreneurship theory states that entrepreneurs do not cause change rather they exploit the opportunities that are brought by change. The entrepreneurs always search for change, respond to it and exploit as an opportunity. Entrepreneurs look for possibilities brought by change and not the problems brought by change. The base of entrepreneurship is the constant pursuit of opportunity regardless of resources currently controlled (Simpeh, 2011).

2.5.6 Resource-Based Entrepreneurship Theories

The resource-based entrepreneurship theory states that access to resources is an important determinant of opportunity based entrepreneurship and the growth of a new venture. It stresses the importance of financial, social and human resources. The access to resources enhances an individual’s ability to realize and act upon discovered opportunities (Simpeh, 2011).

Financial Capital/Liquidity Theory: Financial capital enables establishment of new firms because of the ability to acquire resources for exploiting entrepreneurial opportunities. Entrepreneurs have individual resources that enable them recognize new opportunities and assemble new resources for the creation of a new firm (Simpeh, 2011).

Social Capital or Social Network Theory: Entrepreneurs are embedded in a larger social network structure that comprises a proportion of their opportunity structure (Clausen, 2006). An individual may possess the ability to recognize an entrepreneurial opportunity but lack the social connections to transform the opportunity into a business venture. Strong social ties to resource providers, enables acquisition of resources and enables opportunity exploitation (Simpeh, 2011).

Human Capital Entrepreneurship Theory: Knowledge gained from education and experience facilitates the discovery opportunities and exploitation of the opportunities. Human capital factors are positively related to entrepreneurship and increase opportunity recognition and entrepreneurial success (Simpeh, 2011).

2.6 Conceptual Framework

 

 

 

 

 

 

 

 

2.7 Summary of Research Gaps

Alcohol policies and legal requirements are present in countries all over the world. Governments are committed to protecting their people from the adverse effects of excessive consumption of alcohol and production of alcohol containing harmful substances. Research has been conducted on various laws and policies governing the alcohol industry in various countries. There is also a lot of research conducted on the impact of alcohol laws and policies on the consumers of alcoholic drinks and the general public. Scanty research has been done, however, on the effects of alcohol laws and policies on businesses dealing with the sale of alcohol. Particularly, minimal research has been conducted on the effect the Alcoholic Drinks Control Act of 2010 on Kenyan entrepreneurs selling alcoholic drinks.

 

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Introduction

Research methodology is part of the project proposal that shows the design of the study, population of the study and data collection techniques. This chapter describes the method employed to carry out the research process on the study on the impact of the Alcoholic Drinks Control Act on bar owners and operators in Kasarani District.

 3.2 Research Design

The study will adopt Exploratory Design since this problem has not been researched earlier in Kenya. In addition, the study aims to explain a well-grounded picture on the subject and give direction for the future research.

3.3 Area of Study

The study will be conducted in Kasarani District located within Nairobi County, approximately 10 Kilometers from the CBD along Thika road. In Kasarani, there exist a large number of bars operating in the area making it convenient for the study.

3.4 Sampling Techniques

The study will adopt purposive sampling. Purposive sampling is a type of non-probability sampling that allows a researcher to use cases that have the required information with respect to the objectives of the study

3.4.1 Target Population

The target population will be bar owners and operators in Kasarani District.

3.4.2 Sample Size

The study will purposively select 150 respondents from the target population. This sample has been selected to assure normality since there is no available statistics on the total number of bar owners and operators in Kasarani District.

3.5 Data Collection

The data will be collected using questionnaire and structured interviews. The questionnaires and structured interviews will be administered to bar owners and operators in Kasarani District. Since the study shall adopt qualitative data the study will adopt questionnaire with closed and open ended questions to collect data from female customers. The study will then use interview to collect data from female employees and key management staff. The study will use questionnaires, given that it is the preferred instrument when descriptive design is used in a study (Mcnabb, 2008).

3.6 Tests for Validity

Golafshani (2003) argues reliability is the extent to which results of a research are consistent over time and an accurate representation of the population under study. If tests and retests can be done under similar methodology to produce consistent results, then the study or the research instruments used are considered to be reliable. In other words, it relates more with the measurement accuracy of the data collection instrument. In a study, reliability can be determined by ascertaining the accuracy of the questionnaire. When the data obtained at pilot accurately reflected the elements in our questionnaires, and then the questionnaire can be considered reliable. Pre-testing of the questionnaire will be conducted before the actual data collection. This will be done to ensure that the questionnaires will be well absorbed once the actual data collection is conducted. Testing of validity will also be conducted to ensure clarity of questions, relevance and also to identify deficiencies in the questionnaire. Pre-testing will be done on 10% of the sample size.

3.7 Data Analysis

For the purpose of analyzing the data collected for this research, descriptive study methods will be used. Mugenda & Mugenda, (2003) suggest that a descriptive study depicts the existing conditions and attitudes through observation and interpretation. According to them, the suitability of descriptive research design for a study rests on the fact that human beings live by interpreting phenomenon around them. The primary and secondary data collected will be analysed in statistical tables and interpreted descriptively. Comprehensive inferences and conclusions will be drawn from each table, the details of which will be presented in chapter four of the thesis. This will be achieved using SPSS version 21.0.

3.8 Ethical Considerations

Ethics focuses on the disciplines that study standards of conduct. The privacy of the respondents will be strictly guarded by observing confidentiality; the respondents will be at liberty to omit their names. The respondents will also be provided with adequate information on the aims of the research the procedures that would be followed and the way in which the results will be used. This will enable the respondent make informed decision on whether to participate or not. No form of deception will be used to induce respondent participation.

 

REFERENCES

Alcohol Drinks Control Act of 2010, 4 K.L.R. SS 3-67 (2012).

Clausen, T. H. (2006), “Who identifies and Exploits entrepreneurial opportunities”,             Retrieved from www.ccsr.ac.uk

Golafshani, N. (2003). Understanding reliability and validity in qualitative research. The Qualitative Report, 8(4), 597-607.

Martineau, P. F., Graff, H., Mitchell, C., & Lock, K. (2013). Responsibility without             legal authority? Tacking alcohol-related health harms through licensing and             planning policy in local government. Journal of Public Health, pp. 1–8.             doi:10.1093/pubmed/fdt079

Mcnabb, D. E. (2008). Research Methods In Public Administration and Nonp: Qualitative and Nonprofit Management. Quantitative and Qualitative Approaches, 2nd Edition. New York: Sharp Inc.

Mugenda, O. M., & Mugenda, A. G. (2003). Research methods: Quantitative and qualitative approaches. Nairobi: Acts Press.

Murphy, J. P., Liao, J & Welsch, P. H. (2006). A Conceptual history of entrepreneurial             thought, Journal of Management History. 12, 9-24.

Mwende C. N., Juma D., & Mathooko P. M. (2013). Impact of the Alcoholic Drinks             Control Act, 2010 on Marketing Strategies in East African Breweries Limited.             International Journal of Social Sciences and Entrepreneurship 1 (3), 365-374

Public Health and Alcohol Licensing in England. (2013). Local Government             Association. Retrieved from www.local.gov.uk/c/document…/get file?

Simpeh, N. Kwabena. (2011). Entrepreneurship Theories and Empirical Research: A             summary Review of the Literature. European Journal of Business and             Management 3(6).

The Alcoholic Drinks Control Act and its Impact on the Hospitality Industry. (n.d.)             ICPAK. Retrieved from         www.icpak.com/download.php?a_id=67&download=178

 
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