During the national budget speech in South Africa, Minister of Finance Enoch Gondwana announced an excise duty increase of 3.39% on wine, brandy, and sparkling wine – a feat Wine South Africa has acknowledged as necessary.
According to Wine South Africa, maintaining inflationary adjustments “supports predictability, policy certainty and long-term planning across the wine value chain”.
It said that the industry has consistently advocated for a CPI-linked framework, as contained in the National Treasury’s excise policy.
CEO of South Africa Wine, Rico Basson, said that “policy certainty is vital for a labour-intensive agricultural industry such as wine”.
“Inflation-linked adjustments help balance the government’s fiscal objectives with the sustainability of rural jobs, exports and economic contribution,” he said.
Wine South Africa also notes that the sector “continues to face structural pressures, including declining domestic consumption within the regulated market, rising input costs and constrained margins”, it said that a CPI-aligned increase will provide stability for businesses.
Whilst it affirms that the adjustment reflects “constructive engagement and recognition by the National Treasury of the wine industry’s economic contribution across the entire value chain, from primary production through to the marketplace”, South Africa Wine also said it is “acutely aware of” the social and socio-economic challenges facing the country.
“We recognise that alcohol-related harm due to misuse remains a serious concern. However, meaningful and lasting solutions do not lie solely in further regulatory or excise interventions. Effective law enforcement, collective societal responsibility and coordinated partnerships are important components in addressing these complex challenges. The wine industry stands ready to work alongside the government and broader society in pursuing balanced, evidence-based approaches that protect communities while sustaining economic contribution,” it said.
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