Liquor traders in South Africa have expressed concerns that a proposed increase in alcohol taxes could harm their businesses and fuel the illicit alcohol trade. The National Treasury plans to raise excise duties in the 2025/26 financial year to address alcohol abuse. Industry leaders argue that higher prices alone won't solve consumption issues and may drive consumers to illegal alternatives.
Liquor traders across South Africa are voicing strong opposition to the National Treasury's proposal to increase excise duties on alcohol, set for the 2025/26 financial year. The measure aims to curb alcohol abuse, but traders warn it could devastate legitimate businesses and exacerbate the problem of illicit alcohol.
Oupa Mthombeni, president of the Concerned Tshwane Liquor Traders Association, emphasized that while the industry supports responsible practices, tax hikes won't address core issues. "We don’t want to see liquor traders selling liquor to underage; we don’t want to see liquor traders selling to someone who is already intoxicated; we don’t want to see liquor traders selling liquor to a pregnant woman. Those are the issues that we are trying to do. But by increasing (tax), it’s also going to kill our business as liquor traders, you know," Mthombeni stated.
He highlighted the growing presence of illicit liquor, noting, “There is illicit liquor that is mushrooming around South Africa and people will be buying it because the right liquor is very expensive.” Mthombeni called for collaboration with government and law enforcement to tackle illegal trade rather than relying solely on price increases.
Sibani Mngadi, corporate relations director at Diageo, echoed these sentiments, advocating for a multidisciplinary approach to alcohol abuse beyond just higher taxes. Traders fear that elevated costs will push consumers toward unregulated, potentially dangerous alternatives, undermining both public health efforts and economic stability in the sector.
