E-Malt.com News article: South Africa: National Treasury considering a sharp increase in excise tax on beer

Beer and alcohol drinkers in South Africa could soon be paying noticeably more, following reports that the National Treasury is considering a sharp increase in excise tax on beer.

The Sunday Times reported that the Treasury held a virtual meeting with alcohol producers in November to discuss proposed excise adjustments to wine and beer aimed at reducing alcohol consumption.

Alcohol companies confirmed the meeting, with wine, beer, and spirits producers warning that above-inflation excise increases could drive consumers towards the illicit alcohol market.

This would undermine both revenue collection and efforts to reduce consumption.

Citing research, industry stakeholders indicate that illicit alcohol constitutes approximately 18% of total alcohol consumption in South Africa.

Policy proposals, including a 20% increase in excise on standard beer, should be carefully evaluated.

According to Nomcebo Dlamini, Campaign Manager for the South African Alcohol Policy Alliance (SAAPA), a proposed 20% hike in excise tax at the point of production would “obviously increase the price of beer”.

However, she argued it is both necessary and overdue. Dlamini said excise taxes are one of the most effective and cost-effective ways to reduce alcohol harm, and that this is a move her organisation fully supports.

Dlamini believes the current price of beer in South Africa is part of the problem. She points out that alcohol is often cheaper than basic necessities.

She highlighted that in some instances, beer is lower in price than a loaf of bread, which is a basic need for most people.

This affordability fuels excessive and harmful drinking, and Dlamini insisted that excise adjustments should be made.

Apart from boosting government revenue, Dlamini argued that higher prices would change drinking behaviour.

“Whenever the price of alcohol is at a certain amount, there is less drinking,” she said, citing World Health Organisation evidence, which showed that even those who continue to drink tend to consume less when prices rise.

She added that this also has major implications for young people. “Currently, young people are able to access alcohol easily, and if the price is higher, then it would mean fewer people are drinking”.

Dlamini also linked alcohol consumption to the country’s mounting healthcare costs, saying South Africa spends almost R249 billion dealing with non-communicable diseases, many of which are worsened by alcohol abuse and binge drinking.

“We see this as a way of reducing the drinking, reducing heavy drinking and dealing with the issue of young people accessing alcohol,” she explained.

Addressing concerns that higher taxes could fuel illicit alcohol production, Dlamini said illegal brewing is not necessarily driven by price, but rather by weak enforcement.

She pointed to problems such as poor licensing oversight, limited inspections, corruption, and “capacity gaps” at provincial liquor boards.

“We also do not want illicit alcohol, just as we do not want illicit trade in cigarettes,” she said. However, she insists that this should not be used as a means to fear-monger and block evidence-based policies.

Dlamini maintained that higher taxes must be paired with stronger enforcement and broader interventions.

“We are not saying this is a silver bullet. There needs to be coordinated action from health, education and social development departments, along with renewed efforts to restrict alcohol advertising,” she warned.

She added that the taxes raised could help fund prevention and healthcare, saying this would assist in dealing with rising cases of cancer and other diseases.

However, the Beer Association of South Africa (BASA) argue that the above-inflation increase will have far-reaching consequences.

BASA CEO Charlene Louw noted that South Africa’s beer industry is one of the most job-intensive in the economy due to its strong downstream linkages. In total, it supported 210,000 jobs and contributed R98 billion—or 1.4% of GDP—in 2023.

Downstream industries that benefit from beer include agriculture, construction, finance and insurance, business services, real estate, transport and storage, wholesale and retail trade, and hospitality.

Small businesses such as taverns and craft brewers are a vital part of this ecosystem and of local communities. They make a substantial contribution to job creation, as well as municipal and national tax collection.

According to the National Development Plan, 90% of the 11 million jobs expected to be created by 2030 will come from small businesses.

However, to sustain sales, brewers and traders are increasingly forced to absorb above-inflation excise increases—squeezing already fragile margins year after year.

Rather than further burdening these businesses, National Treasury has a clear opportunity to implement a CPI-linked excise regime that supports small enterprises, stabilises the sector, and enables job creation.

Louw argues that a stable and fair excise policy will help protect livelihoods, encourage investment, and keep consumers in the legal market.

“It is time to put a cap on ever-rising beer excise and adopt a balanced, forward-looking approach that supports growth rather than constrains it,” she said.


15 January, 2026