South Africa: Beer industry calls for a policy change
South Africa’s beer industry is more than just a source of refreshment - it’s an economic powerhouse woven into the cultural and economic fabric of our country, BizCommunity reported on July 23.
In 2023 alone, it contributed R96.4bn to GDP, generated R56.5bn in tax revenue, and supported over 210,000 jobs, according to Oxford Economics’ “Beer’s Global Economic Footprint” study.
Beer Association of South Africa’s (BASA) mandate is to protect and promote this industry and the livelihoods it sustains. But the association says it cannot do so without fair and forward-looking regulation - particularly when it comes to excise tax policy, which has reached an unsustainable tipping point.
Despite its contributions, the beer industry is under increasing strain.
In the 2025/26 National Budget, excise 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, many 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. These are not just businesses, 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 - not out of malice, but necessity.
The illicit alcohol market is already a growing threat. According to Euromonitor, illicit alcohol consumption rose by 10% CAGR 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.
Over the past year, Basa has deepened its collaboration with government - from social development departments to provincial liquor authorities - to reshape understanding and policy around beer.
These partnerships are starting to bear fruit, with greater openness to constructive engagement and joint problem-solving.
The association has also completed a national beer perception study, revealing key misconceptions. Most notably, beer is widely seen as a high-alcohol product, when in reality it has one of the lowest ABVs among alcohol categories.
This insight will help BASA sharpen its public messaging and promote responsible consumption alternatives, the association said.
On the ground, it is investing in skills development for tavern owners, SMME brewers, and emerging entrepreneurs - many of whom entered the trade out of economic desperation, not choice. Too often, they lack formal business training and remain stagnant for decades due to lack of access to funding, compliance know-how, and basic marketing skills.
BASA’s support includes short courses in financial management, licensing, and social media marketing, and it’s partnering with universities to elevate brewing as a science and a career, particularly for young black South Africans and women, who remain underrepresented in the industry.
As it looks ahead, BASA’s focus is threefold:
• Reframe the conversation around beer - 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 it will be promoting low- and zero-alcohol options under the “Go Zero” campaign.
• Challenge the “one-size-fits-all” excise tax model. Blanket increases ignore the differences between multinational brewers and township-based micro-operators. A differentiated excise framework, or increased SMME support, is essential to level the playing field.
• 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.
If government is serious about inclusive economic growth, it must recognise the role of beer in South Africa’s socio-economic ecosystem. As we approach the Medium-Term Budget Policy Statement, Basa will continue to engage with 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 can’t do that with a tax system that brews failure. The time to act is now, BASA stresses out.
24 July, 2025
