Bloomberg reported that Coke bottler, Coca-Cola Beverages Africa, will rethink its spending plans in South Africa should the proposed tax on sugary drinks be implemented in 2017.<\/p>\n
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.<\/p>\n
CCBA was formed through a combination of SABMiller and Coca-Cola African soft drink operations.<\/p>\n
Bloomberg reported that while neither Coca-Cola nor the bottling group are opposed to taxes, they believe that the proposal is discriminatory and will have a \u201chuge economic impact,\u201d Vukani Magubane, public affairs director for Coca Cola Southern and East Africa, said on Thursday.<\/p>\n
\u201cCommitments around jobs and the like will have to be relooked at in the context of a tax that will have a huge catastrophic effect,\u201d Magubane said.<\/p>\n
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.<\/span><\/p>\n According to Reuters, the\u00a0beverage sector employs approximately 200,000 people in a country where unemployment exceeds 26%.<\/p>\n 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.<\/p>\n \u201cBecause it is an excise duty and not a sales tax, soft drink manufacturers may also have to increase the price of other drinks too \u2013 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.”<\/p>\n “The regressive nature of this tax is that the poor simply pay more,\u201d said BEVSA executive director, Mapule Ncanywa.<\/p>\n Why a sugar tax on beverages won\u2019t tackle obesity in South Africa<\/strong><\/a><\/p>\n There\u2019s a simple alternative to a sugar tax to fight obesity<\/strong><\/a><\/p>\nMore on a sugar tax<\/h3>\n