OnTap Magazine

“The best things in life are free, but sooner or later government will find a way to tax them,” goes an old joke. This is particularly true of excise duties on those little indulgences like cigarettes, liquor and sugar. Governments love these taxes, because they are easy to collect, garner political support, and can be increased every year in line with inflation. In South Africa, excise taxes on beer have risen far faster than inflation. A recent report by Oxford Economics Africa showed that between 2012/13 and 2023/24, excise duties on beer rose by an average of 7.2% a year while general inflation rose by about 5.2% a year. Today, almost 40% of the average price that consumers pay for a bottle of beer goes to government in the form of excise tax and VAT. The researchers found that by 2023/4, the South African government was relying on the beer industry to contribute 34.7% of excise revenues, far higher than Tanzania (22.3%), Australia (8.8%), the UK (6.2%), Mauritius (6.1%), and Canada (3.8%). While beer consumption over time has generally been resilient, that does not hold true during periods when inflation has been high and economic growth has been weak. When excise duties rise sharply, it can drive consumers towards cheaper alcohol products, and even illicit liquor, which is sometimes fatal. Rising taxes have created considerable uncertainty for beer producers. Producers have also faced other challenges in the last few years, including rising input costs such as maize, fertilisers, packaging, fuel and logistical disruptions. This is an important industry, both in terms of social interactions and its contribution to the fiscus. In 2019, South Africa’s beer industry contributed 1.3% to the country’s GDP, supported 249,000 jobs, and paid R43 billion in taxes. Our beer industry places importance on using locally-sourced, high-quality ingredients, which benefits other industries. The beer industry would be better able to manage excise duties if they were applied consistently and predictably. BASA is not asking for government to abolish excise duties. But we want to see sound tax policies that foster the growth of the beer industry, enabling it to create more jobs for the benefit of the South African economy. TAKE A GULP OF TAX WITH YOUR BEER CHARLENE LOUW, CEO, BASA EXPLORE SOUTH AFRICA’S UNIQUE BREW ROUTES THIS FESTIVE SEASON RESPONSIBLY This holiday season, dive into the rich flavours and vibrant culture of South Africa’s craft beer scene by exploring the country’s scenic brew routes. With over 160 world-class craft breweries across all nine provinces, there’s a route for every taste and traveller. From the coastal beauty of the Western Cape’s breweries to the wild charm of Mpumalanga, and the urban craft brews in Johannesburg, each route highlights local flavours and celebrates the diversity of South African beer culture. Are you planning to spend your festive season in Gauteng? In and around the Joburg CBD, you can discover Tolokazi and Just Brew, local breweries that produce exceptional beer worth trying this holiday season. For a unique experience, visit Black Horse Brewing in Magaliesburg, only an hour's drive from Johannesburg. Black Horse Brewing is situated alongside a craft distillery and restaurant and offers accommodation for those looking to extend their stay. In Mpumalanga, Hops Hollow Country House provides a delightful selection of beer on tap, alongwith a comprehensive on-site menu offering breakfast, lunch, and dinner options. The Western Cape boasts an impressive array of over fifty craft brewers. Karoo Brew, for example, not only offers a variety of beers on tap and brewery tours, but also serves delicious food, making it an ideal destination to enjoy with your family this festive season. For more information on beer routes and other exciting places to visit during the holidays, be sure to visit www.beersa.org . Make this holiday season a memorable one with a beer experience unlike any other. Beer tourism is not just about the brews; it’s about experiencing the unique character of each region while supporting local economies. As you plan your festive journey, remember to savour these experiences responsibly. Arrange safe transportation, pace yourself, and make the most of the beautiful settings around each brewery. Enjoy an unforgettable brew-filled holiday, and let’s keep it fun and safe for everyone. Cheers! 10 | Summer 2024 | ontapmag.co.za