A Data-Driven Case for Alcohol Policy Action
New findings from the 2025 South African Budget and expert commentary by Professor Corné van Walbeek from the University of Cape Town (UCT) confirm what alcohol policy advocates have long maintained: increasing excise taxes on alcoholic products is an effective policy.
The new South African evidence shows that the consumption of legal beer is rising. This shows that alcohol tax increases are NOT having the unintended consequence of driving up informal or illicit alcohol.
The evidence therefore dismantles the alcohol industry’s repeated claims about illicit trade.
Legal Beer Consumption Continues to Grow
According to the analysis published in Daily Maverick, the volume of legal, tax-paid beer consumed in South Africa increased by 0.75% in the 2024/25 financial year. This rise contradicts claims made by the Beer Association of South Africa (Basa), which claims that alcohol excise tax increase would cause job losses and increase illicit alcohol use.
There is a very strong disconnect between what the industry is saying and the reality.”
Corné van Walbeek, Professor, University of Cape Town (UCT)
In fact, excise taxes were paid on 3.5 billion litres of beer in 2024/25. Since 2008/09, legal beer consumption has grown at an annual rate of 1.8%, outpacing both GDP and population growth. These facts highlight that tax-induced price increases do not reduce legal sales to the extent claimed by the alcohol industry.
Instead, they provide a powerful public health tool for reducing harm.
The Alcohol Industry’s Strategy: Misinformation and Profit Protection
The alcohol industry often propagates links between alcohol tax increases and a surge in illicit trade – to deter evidence-based alcohol taxation initiatives. However, as Professor van Walbeek explained on CapeTalk’s Afternoon Drive with John Maytham, there is “a very strong disconnect between what the industry is saying and the reality.”
Treasury’s own data prove this disconnect. Higher taxes do not increase illicit sales, suggesting that the industry’s claims are aimed at protecting profit, not people’s health.
Likewise, Movendi International reports that illicit alcohol thrives because the industry saturates the market with extremely cheap products, not because of taxation. Rather than backing efforts to address the illegal alcohol trade, companies often use it as a pretext to oppose and undermine evidence-based alcohol policies.
Tiered Taxation Encourages Lower Alcohol Content
The 10-year review by the National Treasury supports the implementation of a tiered alcohol tax system. Under this structure, beverages with lower alcohol content are taxed less. According to Daily Maverick reporting, this framework has the potential to reduce harm by incentivising producers to lower the alcohol concentration in their products, while consumers are likely to switch to lower-strength alcohol products because they are affordable.
Removing alcohol units from the market is sound and evidence-based alcohol policy and raising alcohol taxes is a proven tool to remove alcohol units from the market.
Policy Must Follow the Evidence, Not Industry Spin
The 2025 Budget confirms the value of maintaining excise taxes that prioritise people’s health and well-being.
Policymakers should remain firm against alcohol industry lobbying and misinformation. Van Walbeek and his team argue also provide compelling alcohol policy recommendations:
- Strengthening the South African Revenue Service (SARS),
- Implementing product traceability systems, and
- Promoting lower-alcohol strength products.
Sources
Primedia Plus: “Tax Increases on Cigarettes and Alcohol Do Not Spark Illicit Trade – Economics Professor“
Daily Maverick: “Alcohol and Cigarettes in the 2025 Budget: Anchor Policy in Data, Not Industry Spin“