South Africa’s beer industry is more than just a source of refreshment − it is an economic powerhouse woven into the cultural and economic fabric of our country. Evidence thereof is in Oxford Economics’ “Beer’s Global Economic Footprint” study. It revealed that in 2023, the industry contributed R96,4 billion to South Africa’s gross domestic product (GDP), generated R56,5 billion in tax revenue, and supported more than 210 000 jobs.
The Beer Association of South Africa’s (Basa) mandate is to protect and promote this industry while sustaining livelihoods.
But it cannot do so without fair and forward-looking regulation – specifically to excise tax policy, which has reached an unsustainable tipping point.
Despite the beer industry’s contributions to the country’s economy, it is under increasing strain. In the 2025-’26 national budget, tax on alcohol was raised by 6,75%, continuing a pattern of above-inflation hikes.
While large players may be able to absorb some of the blow, numerous small and craft brewers cannot − resulting in closures, job losses, and declining sector diversity.
Currently, excise and VAT together account for up to 40% of the price of a 340ml beer − exceeding the average brewer’s operating costs. For township taverns and community brewers, often micro-entrepreneurs, this is unsustainable.
They are lifelines in economically marginalised communities.
Adding fuel to the fire, several provinces have introduced steep increases in licensing fees across manufacturing and retail categories. For small players, these increases push them closer to non-compliance, or worse: illicit activity. This happens not out of malice, but necessity.
The illicit alcohol market is already a growing threat. According to Euromonitor, the compound annual growth rate (CAGR) of illicit alcohol consumption rose by 10% between 2017 and 2020, accounting for 22% of total consumption. The lack of enforcement, compounded by high taxation and regulatory burdens, is inadvertently driving consumers and producers underground − eroding both public safety and tax revenue.
The conversation around beer should be reframed − not just as a product, but as a driver of jobs, tourism, township economy development and heritage.
This is particularly crucial in the run-up to October’s Transport Month and the festive season, where low- and zero-alcohol options are campaigned.
Also, the “one-size-fits-all” excise tax model should be challenged. Blanket increases ignore the differences between multinational brewers and township-based micro-operators.
A differentiated excise framework, or increased small, medium, and micro enterprise (SMME) support, is essential to level the playing field.
Another need is to call on SMME support agencies to include alcohol-related businesses in their development mandates. These are legitimate businesses supporting households and communities − they deserve the same support as any other entrepreneur.
Brewing a sustainable future is fundamental. If government is serious about inclusive economic growth, it must recognise the role of beer in South Africa’s socio-economic ecosystem.
As it approaches the Medium-Term Budget Policy Statement (MTBPS), Basa will continue to engage with the National Treasury and request a review of the current excise policy development process − calling for a structured consultation process that ensures extensive and inclusive stakeholder engagement.
A more transparent and predictable process is essential to address policy uncertainty, which is currently undermining investor confidence and business sustainability − particularly for SMMEs. South Africa’s beer industry is ready to grow, innovate, and lead. But it cannot do that with a tax system that brews failure.
■ Charlene Louw represents major beer manufacturers in South Africa.
