BUDGET 2017: Bittersweet reaction to Gordhan’s remarks on sugar tax

The consumption of sugary and fizzy drinks has steadily fallen in the United States for the last 11 years.
The consumption of sugary and fizzy drinks has steadily fallen in the United States for the last 11 years. ©rez-art/Istock.com

Finance Minister Pravin Gordhan’s promises to have further consultations before the sugar tax is implemented has industry delighted.

At the same time the reduction in the proposed tax from 20% on all sugary drinks to 11% has sugar tax supporters disappointed.

Beverage SA executive director Mapule Ncanywa welcomed the promise of more collaboration.

“We believe that through collaboration with all the relevant role players‚ we can find ways to create a win-win for all South Africans‚ contribute positively to health outcomes and avoid any job losses.”

The beverage industry also said they will be creating more sugar-free drinks and reducing the calories in sugary drinks in response to calls for the tax.

Sugar tax wars: arguments for and againstConsumers will hear on Wednesday if they will pay 20% more for sweetened fizzy drinks as Finance Minister Pravin Gordhan is widely expected to announce a sugar tax on fizzy drinks and cordials. 

The drink industry also wants another study on what South Africans eat and drink to prove sugary drinks should be targeted with a tax. Gordhan confirmed 100% fruit juice would be included even though this was left out of last’s year proposal for a sugar tax in the 2016 budget speech.

The Healthy Living Alliance that represents academics and those interested in the tax said it was pleased Gordhan has said the tax would be implemented in a year

But it was disappointed that the tax was lower and says it may not work.

The alliance said: “The proposed level of taxation has been reduced significantly and it might not be sufficiently high to deter consumption of these drinks. It appears from the Budget Review that the tax will be in the region of 11% instead of the 20% tax rate‚ based on a 330ml can‚ proposed in Treasury’s policy paper.”

South Africa’s sugar tax: a bold move, and the right thing to doSouth Africa’s planned sugar tax has come under severe scrutiny from its parliamentarians. The questions they’re grappling with are whether the country needs a tax and how effective it will be. 

Alliance coordinator Tracey Malawana said: “While there is no silver bullet that will slim down the nation‚ cutting sugar consumption is a non-negotiable public health measure. Sugary drinks are a major contributor to excessive sugar intake.”

Discovery Vitality welcomed the tax announcement. Dr Craig Nossel‚ Head of Vitality Wellness said: “We believe that action is required to reduce the intake of sugary drinks‚ and support the proposed sugar tax. From a health point of view‚ it is excellent news that sugar content will remain the base on which the tax is applied as this encourages reformulation and the availability of drinks with a lower sugar content.”