South Africa: Beer Association of South Africa responds to above-inflation excise increase on beer in new budget

The Beer Association of South Africa (BASA) acknowledges the 2025 Budget Speech delivered during the Budget 3.0 update. However, the association is deeply concerned by the decision to proceed with an above-inflation excise increase on beer—unchanged from the initial proposal despite repeated calls for review, Cape Business News reported on May 23.

This marks the third missed opportunity by National Treasury to reconsider a policy that is increasingly out of step with the economic realities facing the sector. Beer producers continue to face escalating input costs, weakening consumer demand, and strained infrastructure. An aggressive and unpredictable excise regime only adds further pressure—undermining investment, job creation, and economic growth, the association said.

The increase also accelerates the shift toward illicit alcohol trade, which now accounts for an estimated 22% of total alcohol consumption in South Africa, costing the fiscus over R11.3 billion in lost revenue. While the brewers note the Minister’s commitment to bolstering SARS’ capacity to combat illicit trade, effective enforcement must be matched with sensible tax policy that does not unintentionally drive consumers toward illegal markets.

BASA calls on National Treasury to:

• Commit to tax certainty by aligning annual excise increases with projected inflation, consistent with global best practice.
• Protect the legal alcohol sector by avoiding disproportionate hikes such as the proposed 20% increase on standard ABV beer under the excise policy review.

“We remain committed to engaging constructively with government to support a sustainable and responsible alcohol industry that contributes meaningfully to South Africa’s economy—particularly in townships and rural communities—while addressing broader social challenges,” BASA said.

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