Excise tax: SAB calls for regulatory certainty to protect R71b industry

While the beer industry made a huge contribution of R71 billion to the economy, the SA Breweries (SAB) yesterday asked government for policy certainty to curb “an operationally disruptive” annual excise tax increase by National Treasury.

SAB chief executive Richard Rivette-Carnac told the annual state of beer economy gathering in Ekurhuleni that government’s budget surprise in announcing new excise tax was disruptive.

“Big price increases that come as a surprise, impact the trajectory of the business,” he said.

“Every year, we have no clue as to what is likely to be in the budget speech – whether excise tax is to be increased and by what percentage point.

“Operationally, it is a big problem because we need to stop all brewery plants and recalibrate all our systems – more of a setback.”

As part of a panel discussion, economists Dawie Roodt and Olebogeng Ramatlhodi concurred with Rivette-Carnac on the adverse impact on process followed in excise adjustments – putting the alcohol industry under pressure.

“In running the business, you must take account of the costs, but everything now must come to a stop,” said Roodt.

“It would be easier for excise duties if you knew beforehand what the changes would be.” Ramatlhodi said regulatory certainty was “key in creating industry stability”.

Bureau for Economic Research expert Linette Ellis said despite the South African consumer being under pressure this year, prospects looked better for 2024- 25 financial year.

“The SA consumer has been taking strain from high inflation and rising interest rates over the last year, with consumer sensitivities around beer price hikes having increased,” said Ellis.