The Beverage Association of South Africa says that a soft drink tax will make South Africans poorer, not thinner.
The government has proposed a 20% tax on sugar sweetened drinks. Finance Minister Pravin Gordhan announced earlier this year that a sugar tax will be levied with effect from 1 April 2017.
BEVSA says that through voluntary industry-driven initiatives – such as reformulation and smaller pack sizes – the beverage industry has reduced 53kj per litre.
“This proposed soft drink tax will cost you at least 20% more for soft drinks to remove a half teaspoon of sugar from our daily average intake of 12 638 kj,” it said.
Phil Gutsche, chairman of Coca-Cola Beverages Africa, has said that South Africa could lose as many as 60,000 jobs in the beverage industry because of the proposed tax.
According to Reuters, the beverage sector employs approximately 200,000 people in a country where unemployment exceeds 26%.
BEVSA 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.