The National Treasury has proposed raising excise taxes and introducing minimum unit pricing on alcohol to help curb harmful drinking.
- The National Treasury has propose raising excise taxes and introducing minimum unit pricing for alcohol to help curb harmful drinking.
- Alcohol policy activists support the proposal, citing its potential to reduce alcohol-related harms.
- Liquor companies say they need more time to comment on the proposal.
National Treasury has released a policy review proposing changes to alcohol tax and considering the implementation of minimum unit pricing to curb harmful drinking. The public has until 13 December to comment.
The move has been welcomed by alcohol policy activists who have been advocating for stricter controls on liquor sales, but members of the liquor industry want the deadline for comments to be extended.
Treasury’s proposal follows recommendations from the World Health Organisation (WHO) for raising alcohol taxes to make drinks less affordable and reduce consumption. The WHO says that 5.1% of the global burden of disease and injury is attributable to alcohol.
Alcohol harm is significant in South Africa. A WHO report in 2018 found that 59% of South African drinkers aged 15 and older binge drink. A 2014 study published in the South African Medical Journal estimated that alcohol costs the country up to 12% of its GDP.
During the Covid-19 alcohol bans, trauma cases in hospital dramatically dropped, highlighting the link between alcohol and violence. South Africa also has the world’s highest reported rate of Foetal Alcohol Syndrome Disorder (FASD).
Treasury says the current excise tax structure “may no longer be fit for purpose”. Excise taxes have in recent years risen faster than inflation, while alcohol prices have not kept pace. Treasury says this has caused taxes to rise above the current guidelines, and created a widening gap between taxes on spirits and other alcoholic beverages.
To fix this, Treasury proposes adjusting taxes annually based on inflation rather than average retail prices, and taxing drinks by their alcohol content instead of their total volume.
This system could increase taxes on wine and beer, but lower taxes for low-alcohol alternatives, encouraging their production over higher-alcohol products. Treasury also supports introducing minimum unit pricing – setting a floor price below which alcohol cannot be sold.
Alcohol policy activists have welcomed the proposals.
“We commend Treasury for including an alcohol harms lens in their proposal,” said Aadielah Maker Diedericks, secretary general of the Southern African Alcohol Policy Alliance (SAAPA).
Diedericks believes minimum pricing could reduce binge drinking and discourage bulk promotions and “2-for-the-price-of-3” specials.
The DG Murray Trust (DGMT) has also welcomed Treasury’s proposal. A 2018 research report it commissioned, authored by UCT economists Prof Corné van Walbeek and Dr Grieve Chelwa, found that a minimum price of R6 per drink could cut consumption among binge drinkers by 6.2%.
Both SAAPA and DGMT want the stalled Liquor Amendment Bill to be reintroduced to Parliament, which would tighten controls on alcohol sales and advertising.
Liquor industry reacts
Members of the liquor industry say the 30-day public consultation period is too short to respond to Treasury’s proposal.
“While we acknowledge the need for policy updates, we have serious concerns about the document in its current form and the limited timeframe allocated for public consultation,” Heineken Beverages said in a statement.
Heineken believes the policy will have a wide-ranging impact on the agricultural sector and may increase illicit alcohol trade. “The proposals, albeit vague, are expected to drive up the cost of legal alcohol, pushing more consumers towards unregulated products,” the statement reads.
South African Breweries (SAB) had not responded to GroundUp at the time of publication, but told Daily Maverick last week that it agrees the current excise tax structure needs to be reviewed.
SAB told Daily Maverick that it is engaging with government “to see the tax framework become fair, equitable and predictable”.
The company also published a sponsored article in Moneyweb last week, citing a report it commissioned from economic advisory firm Oxford Economics. The research report discusses how “unpredictable” excise taxes affect beer producers.
© 2024 GroundUp. This article is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
You may republish this article, so long as you credit the authors and GroundUp, and do not change the text. Please include a link back to the original article.
We put an invisible pixel in the article so that we can count traffic to republishers. All analytics tools are solely on our servers. We do not give our logs to any third party. Logs are deleted after two weeks. We do not use any IP address identifying information except to count regional traffic. We are solely interested in counting hits, not tracking users. If you republish, please do not delete the invisible pixel.
apple nola
A British man on safari walks into a bar far out in the reaches of a game reserve in Southern Africa, he stays at the bar for a while shooting the shit with the bartender and drinking like a fish, he offer to buy the barkeep a round and since no one else is within 2km of their small oasis of liquor the barkeep obliges. The englishman goes off to the bathroom to have a good old go at the porcelain, he\’s back and ready for a few more whiskeys. He\’s just sat down when suddenly in the distance he hears a scream. He looks over his shoulder and dismisses it as nothing, he turns to the barkeep and orders a drink, takes a sip and hears the scream again. He looks at the barkeep who just shrugs it off. A minute or two later he and the barman hear it again and go outside to take a look. They see a lone figure running towards them screaming, he spots them and lets out a cry, RUN!!!!! HE\”S COMING!!!!!
The barkeep and the Englishman both look at the terrified bedraggled sight before them, and try to calm him down, but he\’s completely inconsolable. They give him water and finally manage to get a word out of him but he struggles free from their grasp and run away screaming.
A few minutes later the same thing happens with a whole group of men running in and screaming, he\’s coming, he\’s coming the barkeep grabs hold of one of the men as he tries to sprint past the bar and tries to get information out of him, again no response other than terrified gibberish.
The barkeep and his customer are starting to get worried, they start to pack up before another group of horrified natives run up to the bar most of them flee but one tries to hide behind the bar, the barkeep pulls out a shotgun and points it at the terrified man\’s face, finally managing to coax some words out of him. \”He\’s coming for us, Vernon Koekemoer is coming for us, we have to hide!!! We have to get out of here.\” He gets up and tries to run but the barkeep grabs him, feeling trapped in a panic he grabs the barkeeps shotgun and blows his own head off. The Englishman and the barkeep look at each other starting to really panic now.
They look out of the window and off in the distance they see a tornado coming towards the bar, at the bottom of the tornado they see the hugest beast of a man they have ever seen, as he gets closer they spot that he is riding a rhinocerous and using a crocodile as a riding whip, with each smack of the crocodile across the back of the rhino the louder is screams and the faster it runs, the tornado following it getting ever larger.
The 2 look at each other and start to fortify their position, they\’ve got a gun and they\’re waaay to drunk to run, so they start piling bar stool and tables and anything they can get their hands on to make sure they\’ll be safe when he arrives. They\’re not gonna make it, they can see the man slowing down his rhino, by now the crocodile is nothing but reptile paste on the bruised rump of the half dead rhino, the rhino drops down dead from exhaustion and crashes to the ground right outside the bar the tornado loses it\’s last breath in a cloud of dust as the huge man crashes his way through the make shift barricade and charges up towards the bar where the 2 men have taken shelter, he grabs a bottle of the hardest liquor on the shelf and down the entire litre in 1 gulp, he peers over the bar sobbing and sees the 2 defenders cowering down behind the crates of beer, they look up at the mans\’ face and he stares at them with a look of complete and utter hopelessness, he stares at them for a half second and half screams, half sobs, \”Oh my god what are you still doing here!!! WE HAVE TO GET OUT OF HERE NOW!!!! Vernon Koekemoer is coming!!!!\”
green ghost
Why was Dr. Jekyll banned from South Africa? Because he was a part Hyde