South Africa's sugar industry, led by SA Canegrowers, is urging the government to scrap the health promotion levy, blaming it alongside cheap imports for significant job losses. Health advocates, however, defend the tax as a key measure to curb obesity and prevent diabetes-related deaths. This clash underscores broader tensions between economic pressures and public health priorities.
The Health Promotion Levy (HPL), often called the sugar tax, took effect in April 2018 to target sugar-sweetened beverages exceeding 4g of sugar per 100ml. It imposes a rate of 2.1 cents per gram of sugar beyond the initial 4g, affecting sodas, flavoured waters, and energy drinks but sparing packet sugar, home-brewed drinks, and preserved foods like jams.
Introduced amid rising diabetes and obesity rates, the levy initially reduced consumption, particularly in low-income households. Yet, industry lobbying has frozen planned tax hikes until at least 2026.
SA Canegrowers attributes a surge in subsidised sugar imports and the HPL to job cuts in the sector. A National Economic Development and Labour Council study estimates 16,000 jobs lost in the sugar and beverage industries in the levy's first year. Economist Xhanti Payi notes that subsidised imports undercut local prices, while the tax might push poorer consumers toward unregulated alternatives without addressing root causes like income inequality. "We want healthier people; we understand that income is a critical part of a healthy population," Payi stated. He advocates redirecting tax revenue to bolster other sectors and offset employment gaps.
Contrasting this, the Healthy Living Alliance (Heala) insists the HPL is a vital public health tool, separate from trade tariffs. "We cannot allow tariff debates to derail a health tax that works," said CEO Nzama Mbalati. Research from Priceless SA at the University of the Witwatersrand finds no clear link to job losses. Modelling suggests raising the levy to 20% could avert 619,000 diabetes cases, save 72,000 lives, prevent 85,000 strokes, and cut healthcare costs by R23.9 billion over 25 years. Dr Darren Green, a health advocate, described it as "a protective shield for millions of South Africans."
The debate pits industry survival against long-term health gains, with calls for ringfenced revenue to balance both.
