South Africa Wine has expressed deep disappointment following the government’s latest budget announcement, describing the new excise tax increase as a damaging blow to one of the country’s most vital agricultural sectors.
Despite “months of intense engagement with the National Treasury,” the organisation says the government has chosen to ignore repeated warnings about the serious consequences of excessive excise hikes. Minister of Finance Enoch Gondwana announced in his national budget speech that excise duties on all alcoholic beverages will increase by 6.75%, a move South Africa Wine says will devastate wine producers, cost jobs, and weaken rural economies.
“This is an irresponsible and short-sighted decision,” South Africa Wine said in a statement. “The government has ignored economic realities and stifled investment, growth, and employment in one of South Africa’s most vital agricultural sectors.”
A Blow to Producers, Jobs, and Competitiveness
The impact on the wine industry is expected to be far-reaching. Small-scale farmers and businesses, many already struggling to survive, now face even greater pressure to keep their doors open. The sector, which supports over 270,000 jobs, will likely experience increased unemployment as producers are forced to cut costs or shut down operations altogether.
South Africa Wine also warns that South African producers are becoming less competitive in international markets. “South African wine is taxed out of the market while competitor nations benefit from more favourable policies,” the organisation said, highlighting concerns that the tax hikes make it harder to compete globally.
In addition, the group predicts that higher excise rates will fuel the growth of illicit trade, as consumers seek cheaper alternatives in the unregulated market. This shift, they argue, will ultimately reduce government revenue, rather than boost it as intended.
Industry Vows to Continue Engagement
South Africa Wine has made it clear that they do not intend to accept the excise increases without response. “We will continue to fight against this unfair tax burden,” they said, vowing to rally industry stakeholders to challenge the government’s policy and advocate for a more balanced and sustainable approach.
The organisation stressed that it will “not back down in ensuring that the wine industry’s contributions to the economy and employment are recognised and protected.”
In a more hopeful note, South Africa Wine welcomed the opportunity to engage with the National Treasury on the proposed taxation of alcoholic beverages, as mentioned during the budget speech. “Your voice matters, and we will continue to fight for it,” they assured industry members and supporters.