The Beer Association of South Africa says National Treasury should balance fiscal and enforcement goals with measures that keep the legal beer market competitive and affordable.
The Beer Association of South Africa (BASA) says protecting the competitiveness of South Africa’s legal beer market should form part of the country’s response to illicit trade.
In a statement issued Friday, and while BASA is engaging with National Treasury on alcohol excise policy, BASA said the response should balance fiscal objectives, enforcement priorities and the long-term sustainability of the legal market.
BASA said South Africa’s beer industry supports approximately 210,000 direct and indirect jobs, contributes R96.5 billion to gross domestic product and generates about R67bn in annual tax revenue.
“Protecting the legal beer market is not only about protecting brewers. It is about protecting the broader value chain of farmers, suppliers, distributors, retailers, taverns and hospitality businesses that rely on a strong and competitive formal market,” said Nirishi Trikamjee, BASA’s interim chief executive.
The association said illicit trade remains a broader challenge for South Africa’s alcohol sector and the economy. However, it argued that policy discussions should consider both enforcement measures and the strength of the legal market.
BASA said beer, which it described as South Africa’s largest formal alcohol category, plays a significant role in the regulated alcohol economy by offering consumers an accessible, regulated and lower alcohol product choice.
The association said affordability was an important consideration in maintaining the formal market, particularly as consumers face pressure from inflation, unemployment and rising living costs.
Research cited in BASA’s engagement with National Treasury found that 66% of surveyed consumers identified price as a critical factor in their purchasing decisions.
BASA said there was limited publicly available evidence isolating the specific effect of excise increases on illicit beer. However, it said policymakers should consider how affordability and price differences between legal and illicit products may influence consumer behaviour.
The association argued that, as the price gap between legal and illicit products widens, consumers may have a greater incentive to seek cheaper alternatives, placing further pressure on the regulated market.
edward.west@nationalmg.coza
THE NATIONAL