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02 September 2021

Prices for beer in South Africa have risen modestly despite excise hike

South Africa | Official data, published in August 2021, show that white wine has seen the biggest price increase, rising by an average of 12.8 percent between June 2020 and June 2021. This was followed by whiskey (+8.1 percent), red wine (+6.7 percent) and spirit coolers and ciders (+4.5 percent). The average price of beer has increased by only 3.3 percent over the 12-month period, the statistics body said.

The only major alcohol category which saw a decrease in price is liqueurs, with a marginal drop of 1.1 percent over the last year.

Alcohol and liquor prices are an easy target for tax hikes in South Africa. In February this yar, excise duties increased by 8 percent as part of the 2021 Budget changes. This was above the rate of inflation. Brewers were probably well advised not to pass the excise hike on to consumers immediately as they are still reeling from a 30 percent drop in beer sales in 2020.

Alcohol and liquor prices are an easy target for tax hikes in South Africa. In February this yar, excise duties increased by 8 percent as part of the 2021 Budget changes. This was above the rate of inflation. Brewers were probably well advised not to pass the excise hike on to consumers immediately as they are still reeling from a 30 percent drop in beer sales in 2020.

Further strain has been placed on the industry through lockdown restrictions and bans over the last 18 months. Under the country’s adjusted level 3 lockdown, which came into effect on 26 July, the sale of alcohol from retail outlets for off-site consumption is permitted between 10am and 6pm from Monday to Thursday. Alcohol sales for on-site consumption are permitted as per licence conditions until 8pm.

Prohibition boosts illicit alcohol sales

South Africa has faced 500 days of alcohol sales bans on four separate occasions since the end of March 2020 as part of the country’s lockdown restrictions.

It is estimated that the illicit alcohol trade has reached 22 percent of total market volumes in South Africa.

South Africa’s economy is in dire straits as indicated by unemployment figures. More than a third of South Africa’s workforce was jobless in the second quarter of 2021. Considering that millions of South Africans have become discouraged or given up looking for work, this figure could rise to 44.4 percent.