THE Gauteng government would retain its six-month moratorium on new liquor licences, economic development MEC Qedani Mahlangu said yesterday.

The moratorium was imposed in August upon the discovery that employees at the department had been issuing fraudulent licences.

It was meant to give the department time to set up new structures and systems.

Her department now "had its house in order", Ms Mahlangu said, but wanted to use its "new regime" to address the social and economic implications of liquor trading. The new system allowed for occasional and catering permits to be issued from tomorrow and licensing renewals from December 1, she said, but the moratorium on new licences would not be lifted.

The moratorium had faced legal challenges over its validity but the courts ruled in favour of the department in all the cases.

Liquor licence consultant Leon Botha said yesterday that the moratorium was a "futile exercise" which had not only caused a loss of income for businesses, but for the state as well.

Gauteng's economic development department should have found a way to continue issuing licences while improving its systems, he said. "There are a lot of people at the department sitting there doing nothing."

The CEO of the Federated Hospitality Association of SA, Brett Dungan, said the department should not have needed "to fix something that shouldn't have been broken" .

Besides the loss of revenue for the hospitality industry, the moratorium had also been "massively inconvenient", he said.

Ms Mahlangu said her department was also concerned about large retailers selling alcohol in traditionally black townships .

When issuing new licences in townships for large retailers such as Spar, Pick n Pay and Woolworths, the department would "protect the interests of the small players out there", she said.

"Why should we squeeze the small guy to give Woolworths a bigger margin?" she asked.

Mr Botha said while there were provisions in the Liquor Act on monopolies, the department might need to prepare itself for "a whole lot of court cases ".