“Decision on proposed R20 billion tax increases still to be made”
SA News reports:
“South Africans will have to wait until the 2026 Budget to find out whether the proposed R20 billion in additional tax increases can be withdrawn.
“Presenting the Medium-Term Budget Policy Statement (MTBPS) at a sitting of the National Assembly at the Good Hope Chamber in Parliament, Minister of Finance Enoch Godongwana said a final decision will be announced in the 2026 Budget.”
“Beer Association of SA warns high taxes fueling dangerous illicit alcohol trade”
EWN reports:
“The Beer Association of South Africa (BASA) has issued a warning that heavy taxation on the legitimate industry is directly contributing to the growth of the illicit alcohol trade. BASA CEO Charlene Louw cited a study by the global research firm Euromonitor, which found that illegal alcohol currently accounts for 18% of the country’s consumption. This shadow market is estimated to be costing the government an alarming R16.1 billion in lost tax revenue.
“Louw further cautioned that some of these unregulated products pose a severe threat to public health. ‘Some of these illicit products are deadly and are really fatal to human beings and are not meant for human consumption. And I think that’s where, again, our plea is to the government to say the more and more we push consumers towards this illicit market, we are putting people’s lives at risk.’
“The association is urging the government to reconsider its current tax strategy, stating that inflation-linked tax adjustments would help stabilise the formal industry, protect existing jobs, and discourage consumers from turning to the cheaper, but dangerous, illicit market.”
Assessment
Alcohol Industry Mobilises to Block Meaningful Tax Increases
With final decisions still to be taken in the 2026 Budget, the current phase is primarily about influence and shaping the information environment. Finance Minister Enoch Godongwana’s support for alcohol taxation as a health measure forms an important backdrop, signalling that alcohol excise policy is being considered not only as a revenue tool but also as part of a broader strategy to prevent and reduce alcohol harm in South Africa.
Alcohol industry lobby group BASA – with Heineken and AB InBev as prominent members – has, alongside other alcohol industry front groups, been aggressive during this period, using the public consultation process and media coverage to repeat long-standing claims aimed at limiting alcohol tax increases to inflation or below. The alcohol industry’s core objective is to derail alcohol tax increases that would meaningfully reduce alcohol affordability, consumption, and harm and cut into industry profit margins.
Euromonitor as Long-Standing Tool of Big Alcohol Lobbying and Eco Chambers
A central pillar of this strategy is the repeated use of Euromonitor International to frame illicit alcohol as a dominant and growing problem that is highly sensitive to taxation. For more than a decade, Big Alcohol has relied on Euromonitor to construct and push this flawed narrative across regions and policy cycles. The industry storyline is systematic: they misrepresent illicit markets as vast, expanding, and likely to worsen if alcohol taxes rise. These claims are presented as authoritative evidence, despite being based on industry-commissioned consultancy work, not independent and peer-reviewed science.
A defining feature of Euromonitor’s illicit alcohol analysis is its lack of methodological transparency. Reports contain extensive numerical detail, yet provide little or no information on data sources, sampling strategies, or modelling assumptions. The figures cannot be independently verified or reproduced, but their seeming precision gives them rhetorical power.
Once produced, these findings are repackaged and amplified across the global alcohol industry ecosystem, from front groups to sympathetic media outlets, creating the illusion of a robust evidence base.
Independent Evidence Contradicts Industry Claims
However, this industry narrative contrasts sharply with independent evidence. WHO analyses show that well-designed alcohol taxation does not automatically lead to increased illicit consumption. Peer-reviewed modelling further demonstrates that higher alcohol taxes, combined with targeted enforcement, can reduce both recorded and unrecorded alcohol use.
In the South African context, this is reinforced by this analysis by Prof Corné van Walbeek, Sam Filby, and Nicole Vellios of the Research Unit on the Economics of Excisable Products at the University of Cape Town, which shows that alcohol tax revenue has continued to increase despite repeated alcohol excise increases.
Treasury Aligns With Evidence, Not Industry Spin
The Treasury’s response to the public consultation reflects this evidence-based understanding. It recognises illicit alcohol as a challenge, while rejecting the simplistic causal link promoted by the alcohol industry lobby between taxation and illicit trade. By emphasising enforcement, regulatory coherence, and sustained policy implementation, the Treasury aligns itself with global evidence and international standards rather than alcohol industry spin.
For advocates, the period ahead of the 2026 Budget presentation offers a critical opportunity to expose the flaws in the Big Alcohol claims, make the case for the necessity of above-inflation alcohol tax adjustments, and support modern and evidence-based alcohol taxation as part of a comprehensive approach to prevent and reduce alcohol harm in South Africa.