SA sugar industry fights back against 'sugar tax' as budget looms

Consumers urged not to panic buy as industry says it is ready to 'absorb' extra levy

Treasury expected to announce 'sugar tax' of up to 20% in Wednesday's budget speech

The South African sugar industry has launched a last-ditch attempt to convince Treasury not to introduce a "sugar tax" in Wednesday's budget, warning that the move could have a devastating impact on jobs and the economy.

Treasury is expected to announce a "sugar tax" of up to 20% when Finance Minister Pravin Gordhan delivers his budget speech on Wednesday. The tax is aimed at reducing the consumption of sugary drinks, which have been linked to obesity and other health problems.

But the sugar industry has warned that the tax will not only fail to achieve its public health objectives, but will also harm the economy and cost jobs. The industry estimates that a 20% sugar tax would cost the economy R1.8bn and lead to the loss of up to 5,000 jobs.

The sugar industry has urged consumers not to panic buy ahead of the possible implementation of a "sugar tax". The industry said it is "ready to absorb" any additional levy that may be imposed on sugar-sweetened beverages.

The South African Sugar Association (SASA) said in a statement on Monday that it has been engaging with Treasury and other relevant stakeholders to find a solution that will "protect the interests of all stakeholders, including consumers, sugar producers, and the economy".

"We have made it clear to Treasury that we are not opposed to measures that promote the consumption of healthier food and beverage options," SASA said. "However, we believe that a sugar tax is not the most effective or efficient way to achieve this goal."

SASA said it supports the implementation of a range of measures to promote healthier lifestyles, including nutrition education campaigns, increased access to healthy food and beverage options, and the promotion of physical activity.

"We believe that these measures would be more effective in reducing the consumption of sugary drinks than a sugar tax," SASA said.

The industry has also warned that a "sugar tax" could lead to job losses and a decline in investment in the sugar industry. The industry employs around 200,000 people in South Africa and contributes around R15bn to the economy.

The Treasury has said that it is considering a range of measures to reduce the consumption of sugary drinks, including a "sugar tax". The Treasury is expected to announce its decision in the budget speech on Wednesday.