The Beer Association of South Africa is raising concerns over National Treasury’s proposed overhaul of alcohol excise taxes, warning that higher duties on beer could have unintended consequences. While the review aims to support public health objectives and boost revenue collection, industry players argue it could drive more consumers toward the illicit market, putting jobs, investment and tax revenue at risk. Joining CNBC Africa to unpack the debate is Nirishi Trikamjee, Interim CEO, Beer Association of South Africa.
Fri, 17 Jul 2026 11:04:33 GMT
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Key Points:
- The Beer Association of South Africa said the proposed excise overhaul could increase duties on beers between 2.5% and 9% alcohol by about 20%.
- The industry body warned higher taxes could push price-sensitive consumers toward illicit or homemade alcohol, reducing formal tax collection.
- The association said the beer sector supports more than 210,000 jobs and contributes nearly 100 billion rand to South Africa’s GDP.
- Industry representatives argue that public health goals would be better served by a balanced framework combining enforcement, education and incentives for lower-alcohol products.
Topics
South Africa beer industryBeer Association of South Africaalcohol excise taxNational Treasuryillicit alcohol tradeSouth Africa economypublic health policybrewery jobs
- The Beer Association of South Africa said National Treasury’s proposed overhaul of alcohol excise taxes could raise duties on some beers by about 20% and push consumers toward illicit alternatives.
- The industry body said the beer sector supports more than 210,000 jobs, contributes nearly 100 billion rand to South Africa’s GDP and is a significant source of tax revenue.
- The association argued excise policy should balance public health goals with revenue collection, employment protection and the risk of unintended market distortions.
- The group said international examples, including the U.K. and parts of the European Union, show tax systems can encourage lower-alcohol products through reduced duty rates.
South Africa’s beer industry is pushing back against National Treasury’s proposed alcohol excise tax overhaul, warning that a shift to a tiered system could raise duties on beers with alcohol content of between 2.5% and 9% by about 20% and drive consumers toward the illicit market.
Speaking to CNBC Africa, Nerisi Trikamji, interim CEO of the Beer Association of South Africa, said the industry supports the need to address alcohol-related harm, but argued that tax policy alone cannot solve broader public health challenges and could instead damage a legal sector that underpins jobs, investment and state revenue.
“Excise policy impacts everyday consumers and the challenge is to balance all angles,” Trikamji said. She said policymakers need to weigh revenue collection, public health objectives and the protection of an industry that supports employment and economic activity.
At the center of the debate is Treasury’s review of how alcohol excise taxes are structured. Trikamji said the current framework is based on a litre-of-alcohol approach, while the proposed reform would introduce a tiered structure that, in the beer industry’s view, would materially raise the tax burden on a wide range of products.
She said that increase would come at a difficult time for consumers already under pressure from high borrowing costs, fuel prices and broader cost-of-living strains. In that environment, she warned, a sharp jump in beer duties could have unintended consequences.
“What happens when you increase taxes too much is we actually have unintended consequences where consumers will seek alternatives in perhaps the illicit market,” Trikamji said.
That shift, she argued, would be damaging not only for formal brewers but also for the government’s own revenue base. Illicit or homemade alcohol falls outside the tax net and often outside formal health and safety standards.
The industry body said the beer value chain currently supports more than 210,000 jobs in South Africa and contributes almost 100 billion rand to gross domestic product. Trikamji said a tax increase of the scale being discussed could force closures across the industry, with smaller producers especially exposed.
“If one was to think that beer taxes increased by 20%, this would devastate the industry,” she said. “It would force the closure of breweries, shutdown of microbrewers.”
She said craft brewers would be particularly vulnerable because many cannot absorb a sharp rise in duties without passing it on to consumers. That, in turn, could accelerate downtrading or push buyers toward unregulated alternatives.
The warning comes as South Africa continues to weigh fiscal pressures against public health concerns. Treasury’s argument for excise reform is rooted in the view that higher alcohol taxes can help reduce alcohol-related harm while also boosting revenue collection.
But Trikamji rejected the idea that the industry’s position is simply about protecting brewer margins or sales volumes. She said the sector’s concerns extend beyond large beer makers to a wider ecosystem that includes agriculture, tourism, retail and hospitality.
“We all want a growing, thriving South African economy where everybody wins,” she said, adding that communities where brewers operate also depend on sustainable local economic activity.
She argued that alcohol-related harm requires a broader policy response than tax increases alone. According to Trikamji, effective intervention should include enforcement, compliance, consumer education and product innovation, alongside measured tax reform.
“One tool is not going to fix what we’ve got as an underlying problem in South Africa,” she said, pointing to deeper social challenges including weak consumer education and gaps in social infrastructure.
The Beer Association of South Africa also sought to highlight the industry’s role in harm-reduction efforts. Trikamji said brewers are already involved in responsible-consumption campaigns and grassroots interventions aimed at changing social norms around alcohol use over time.
She said large manufacturers, including programs linked to major brewing groups, are supporting initiatives designed to reduce alcohol-related harm. The industry, she added, does not believe it can address the problem on its own and sees partnership with government and communities as essential.
Another strand of the debate is whether excise design can be used not just to penalize consumption, but to steer it. Trikamji said some international markets have reformed tax policy in ways that encourage brewers to lower alcohol content and invest in new product categories.
She pointed to the U.K. as one example where tax incentives helped manufacturers reformulate products and increase the share of consumers choosing lower-alcohol options. According to Trikamji, lower-strength products in that market have grown from a small share to about 12% of consumption.
She also cited Finland’s reduced rates for beers below 3.5% alcohol by volume, and said up to two-thirds of European Union countries apply some form of lower duty to lower-strength beer. In her view, those examples show that tax reform can be structured to support public health goals without imposing a blanket burden across the category.
That argument may become more prominent as Treasury consults on the future of excise policy. For the beer industry, the preferred outcome appears to be a framework that rewards innovation in lower-alcohol beverages rather than one that sharply raises duties on mainstream products.
The debate is likely to draw close scrutiny from brewers, retailers and policymakers alike, given the sector’s role in employment and tax generation, as well as the government’s effort to curb harmful drinking. What happens next will depend on whether Treasury maintains its current approach or adjusts the proposal to reflect concerns about illicit trade, consumer pressure and the survival of smaller brewers.
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