South Africa sugar tax will cost 60,000 jobs

Reuters reported that South Africa could lose as many as 60,000 jobs in the beverage industry because of the proposed tax on sugary drinks, citing to Phil Gutsche, chairman of Coca-Cola Beverages Africa.

Finance Minister Pravin Gordhan announced earlier this year that a sugar tax will be levied with effect from 1 April 2017.

According to Reuters, the beverage sector employs approximately 200,000 people in a country where unemployment exceeds 26%.

The Beverage Association of South Africa said that many of those jobs on the line are amongst small spaza owners and vendors in the informal sector.

“Because it is an excise duty and not a sales tax, soft drink manufacturers may also have to increase the price of other drinks too – including healthier options such as bottled water and fruit juice to cross-subsidise losses or, in the case of smaller soft drink manufacturers to merely stay in business. The regressive nature of this tax is that the poor simply pay more,” said BEVSA executive director, Mapule Ncanywa.

More on a sugar tax

Why a sugar tax on beverages won’t tackle obesity in South Africa

There’s a simple alternative to a sugar tax to fight obesity

Are all sugars bad for you?

The sugary drinks that will be taxed in South Africa

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South Africa sugar tax will cost 60,000 jobs