Mboweni's sin taxes a 'blow to the beer value chain': SAB

SA Breweries (SAB) has expressed disappointment over finance minister Tito Mboweni’s decision to increase the excise rate for beer by 8%.

Mboweni announced the increase during his budget speech on Wednesday.

SAB said in a statement the move was “yet another blow following a series of setbacks that the beer value chain has had to weather over the last 12 months, including 19 weeks of sales bans culminating in a loss of more than 200,000 jobs [1.2% of national employment] and R52bn lost in GDP contribution [1% of national GDP at market prices]. 

“The announcement means that tax on beer will increase by almost double the rate of inflation. In a time of unprecedented economic hardship, this decision will fundamentally impede the recovery of a value chain already on its knees.”

SAB raised similar concerns to British American Tobacco SA (Batsa) about the sin tax hikes, saying the hike would “inadvertently fuel the consumption of illicit [and often dangerous] substitutes, which have become prevalent and more available as a result of the recent ongoing alcohol bans.

“This decision will aid the growth of illegal trade at the cost of legal, compliant businesses in our industry and will result in losses in revenue to the fiscus.”

SAB bemoaned the fact that there had been no consultation or warning about the impending hike, saying it was “not sustainable for government to continue excluding the private sector from the conversation when decisions of this magnitude and impact are taken”.