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Last Call for Fairness: SA’s Beer Industry Pleads for a Tax Break Before Budget 2026
There’s a bitter aftertaste growing in South Africa’s beer industry, and it’s not from the hops. With Budget 2026/27 on the horizon, brewers from major corporations to backyard crafters are bracing for what they fear is coming: another punishing, above-inflation hike in excise duty. For an industry woven into the nation’s social fabric and economic backbone, this isn’t just about profit margins. It’s about survival, jobs, and a fight against a shadowy underground market.
The call from the industry isn’t for a tax break, but for basic fairness. “What we are calling for is simple,” one representative put it. “Fairness, reasonableness, and predictability.” Their proposed solution is a CPI-linked excise framework. It’s a plea for a system where planning for next year isn’t a high-stakes gamble against National Treasury’s decisions.
The Domino Effect of a Tax Hike
To understand the anxiety, look at the last round. In the May 2025 Budget, excise tax on beer jumped by 6.75%. That was more than double the government’s own new CPI inflation target of 3%. For an industry where input costsfrom barley to glass bottleshave soared 38% since 2000 against a CPI rise of 25%, this is a crushing blow. Margins are being squeezed from both sides.
The real-world consequence? Stalled expansion. Delayed recovery. And for small craft brewers and township taverns, it’s an existential threat. These small businesses are the vibrant, job-creating heart of communities, yet they are forced to absorb costs or risk pricing out their loyal customers.
The Unintended Consequence: Fuelling the Illicit Trade
Here’s the painful irony that even National Treasury has acknowledged. In its own November 2025 policy statement, it warned that illicit trade “robs the fiscus of billions” and “undermines legitimate businesses.” Every significant tax increase on legal beer is a giant advertisement for the dangerous, unregulated underground market.
Beer is a mainstream drink for millions of responsible, often lower-income South Africans. When the price of a legal, regulated six-pack climbs relentlessly, consumption doesn’t just stop. It shifts. It moves to cheaper, untaxed, and potentially hazardous alternatives. The state loses twice: it misses out on the excise revenue it chased, and it unleashes a public health risk.
An Industry Worth Toasting To
Before viewing brewers merely as taxpayers, consider their footprint. This is an economic engine that supported 210,000 jobs and contributed R98 billion to GDP in 2023. Its roots spread deep into agriculture, packaging, logistics, and the beleaguered hospitality sector. The local tavern is more than a shebeen; it’s a small business, a community hub, and a taxpayer.
The National Development Plan pins our job-creation hopes on small businesses. Yet the current excise approach systematically squeezes the life out of them. Where is the logic in hampering one of the very sectors that can deliver on that promise?
A Clear Call for Certainty
The industry’s proposal is straightforward:
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Use CPI as the benchmark. Annual adjustments should be predictable, not punitive.
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Commit to a multi-year framework. Give brewers the certainty to invest in new equipment, hire staff, and plan for the future.
This isn’t a request for special treatment. It’s a call for a partnership that recognizes a stark reality: you cannot tax a formal industry into prosperity while simultaneously fuelling its illicit competitor. A stable, fair excise policy isn’t a handout to brewers; it’s a hand up for the entire value chainfrom the barley farmer to the bartender.
As the final preparations for Budget 2026 are made, the message from South Africa’s brewers is clear. It’s time to put a cap on ever-rising excise and toast to a policy that fosters growth, protects livelihoods, and keeps the nation’s beer in the legitimate, safe light of day.
{Source: Bizcommunity}
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