Beer industry warns of job losses due to potential excise tax hike

As South Africans await the 2026 budget announcement next month, the beer industry is warning that another above-inflation tax increase could harm small brewers, threaten thousands of jobs, and push consumers towards the illicit alcohol market.

This warning comes as Minister of Finance Enoch Godongwana is set to table the 2026 budget on February 25, 2026. The association has noted that past excise hikes have already squeezed profit margins and limited investment, placing small brewers under significant financial strain.

Last year, the government raised beer excise by 6.75%. The association has called on the National Treasury to implement a predictable, CPI-linked excise framework that would give brewers certainty and protect jobs.

"The reality is that beer companies — large and small — already carry a double tax burden: corporate income tax and excise duty. While government may argue that excise is meant to influence consumption, the data shows a more troubling outcome".

"Beer is largely consumed by middle- and lower-income South Africans who are already under severe financial pressure. Continued price increases on legal beer do not meaningfully curb consumption — they simply shift demand toward cheaper, unregulated, and unsafe alternatives".

South Africa's beer industry supports an estimated 210,000 jobs and contributed roughly R98 billion, or 1.4% of GDP, in 2023.

"Certainty in excise policy allows companies to plan ahead, invest with confidence, and continue driving employment across agriculture, packaging, logistics, retail, and hospitality".

"South Africa needs investment, competitiveness, and inclusive growth. A predictable, CPI-aligned excise framework is a practical and immediate step the state can take to support these objectives"

According to the WHO, adult per capita alcohol consumption in South Africa is 9.5 litres of pure alcohol, above the African regional average, with heavy drinking among those who consume. Globally, alcohol contributes to 2.5 million deaths annually, including 320,000 among young people aged 15–29, highlighting the challenge of balancing economic interests in the sector with public health concerns.

According to media reports, the government is considering a significant increase in beer excise as part of efforts to curb harmful alcohol consumption.

Get your news on the go, click here to join the Cape Argus News WhatsApp channel.

Cape Argus