“Budget 2026 Protects Revenue but Leaves the True Cost of Alcohol Unaddressed”
Daily Maverick reports:
“Excise duties on alcoholic beverages will rise by 8 cents on a 340ml can of beer or cider, 15 cents on a 750ml bottle of wine, and R3.20 on a 750ml bottle of spirits. While technically compliant with inflation, these adjustments do not reduce affordability, will not shift consumption patterns, or address the broader fiscal pressures caused by alcohol-related harm.”
Other Articles on Same Topic
- Alcohol industry welcomes inflation-linked excise increases (Cape Argus)
- SAAPA pre-budget campaign: tax reform can’t wait, alcohol’s true cost is paid in lives (TimesLive)
- Spirits industry warned excise tax could exceed R100 per bottle ahead of budget (The South African)
Assessment
SAAPA SA’s Daily Maverick piece is a significant and welcome contribution to the discussion because it directly challenges the assumption that inflation-linked alcohol excise tax increases are adequate. As the alliance makes clear, alcohol harm costs South Africa between 10% and 12% of GDP annually – but behind that figure are overcrowded trauma units, gender-based violence, road traffic injuries, fetal alcohol spectrum disorders, and communities bearing a burden they did not choose.
Merely keeping pace with inflation does nothing to reduce alcohol affordability, lower population-level alcohol consumption, and reduce the burden of alcohol harm and costs. It is a decision to maintain the status quo while the harm continues.
The alcohol industry’s responses to the budget confirms the point. Diageo South Africa welcomed the outcome, noting that it kept excise on spirits below the “symbolic” R100-per-bottle threshold. Heineken South Africa described it as promoting “fairness, stability, and long-term sustainability.” The National Liquor Traders Council praised the “predictability and moderation” of the excise framework. When every major alcohol industry actor welcomes a tax outcome, it is a reliable signal that the policy is ineffective in promoting people’s health and reducing population-level alcohol consumption.
SAAPA SA calls for above-inflation excise tax increases aligned with public health evidence, harmonisation of beer and wine excise rates with spirits based on tax per litre of absolute alcohol, and a track-and-trace system modelled on tobacco control. Each of these measures addresses a known gap: the current excise structure undertaxes beer relative to its alcohol content, incentivising production and marketing of the most widely consumed beverage category. As previously documented, the alcohol industry’s aggressive lobbying ahead of the budget was explicitly aimed at securing this inadequate outcome.
The Treasury’s commitment to continued stakeholder consultations on excise tax review in 2026 opens a window for advocates to advocate for a multi-year, above-inflation alcohol taxation framework that uses excise tax policy to tackle the true cost of alcohol harm.