South Africa Wine and industry leaders have raised concerns at the government’s proposed excise tax increases on wine, which could see rates rise by up to 80%. According to the organisation, the proposal outlined in the recent Alcohol Taxation discussion document poses a severe threat to the sustainability of the wine industry and its significant socio-economic contributions.
Chief executive officer of South African Wine, Rico Basson, said the wine industry already operates in a highly regulated environment, and there is a need for policy certainty.
“These proposals could devastate our industry, driving job losses and forcing producers out of the market. The wine industry supports over 270 000 jobs, contributes R56 billion to the economy, and plays a vital role in rural development.
“The proposed excessive increases in excise rates will destabilise this critical sector and harm communities already facing economic hardship,” he said.
Call for proposal postponement
Basson is calling on the government to extend the deadline for consideration of the proposal as the time frames given are too short. He added that the government intends to announce the changes during the 2025 Budget Speech in February.
“The current excise regime, aligned with international standards, is achieving public health and revenue goals without compromising the industry’s sustainability.
“Instead of penalising compliant producers, the government should focus on combating illicit trade and strengthening law enforcement,” he said.
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According to Basson, the wine industry is not just an economic driver, it’s a cultural cornerstone of South Africa.
“Policy certainty is essential to protect the entire value chain, from vineyard workers to exporters, and ensure the industry continues to thrive as a reliable driver of employment, tourism, and investment.
“We urge the government to work with the wine industry to find a more balanced and sustainable approach to alcohol taxation, postponing any final decisions until after comprehensive consultations, and to limit the wine excise increase to a maximum of CPI in February 2025,” he said.
Communications manager at Groote Post in the Western Cape, Peter Pentz, said the proposed 80% increase in wine excise tax by the government is outrageous.
“This industry supports 270 364 jobs and contributes R56 billion to South Africa’s, gross domestic product. After the devastating impact of the pandemic and alcohol bans, this proposal will shatter an already fragile sector,” he said.
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