Beer Association calls for tax relief ahead of budget speech

23 February 2021 - 14:00
By unathi nkanjeni AND Unathi Nkanjeni
The Beer Association of SA (Basa) has called on the government to offer tax relief to help its members. Stock photo.
Image: 123rf/Jakub Godja The Beer Association of SA (Basa) has called on the government to offer tax relief to help its members. Stock photo.

The Beer Association of SA (Basa) has called on finance minister Tito Mboweni to offer the industry some tax relief ahead of his budget speech on Wednesday.

The association, whose members include the Craft Brewers' Association of SA, Heineken SA and SA Breweries (SAB), said tax relief is the least the government can do to help its members, whose businesses have been devastated by the three bans on alcohol trading.

“To help rebuild the local beer industry, we are calling on minister Mboweni to make a commitment not to increase excise taxes for the forthcoming financial year,” said the association.

“At the very least, we call on him to commit to a below-inflation increase in excise taxes on beer. We need to save jobs and livelihoods, but we cannot do so without any targeted relief from government.”

Basa said small craft breweries were hit the hardest by the three blanket bans on alcohol and most have no certainty of survival beyond the end of February.

Basa also pleaded with the government to assist traders with financial relief and to allow them to renew their liquor licences.

“Our small businesses and craft breweries have been left up the creek without a paddle and the time to save jobs and businesses is quickly running out,” said the association.

“Basa would like to reiterate there is a desperate need for other payment deferrals and financial relief in terms of automatic liquor licence renewals if we are to have any hope of saving the businesses that remain standing.”

The association said although it remains committed to working openly and transparently with the government, it cannot continue to keep businesses alive alone.

“Government needs to come to the table - and fast - if it does not want to increase SA's already staggeringly high unemployment rate of 30.8%,” said Basa.

Earlier this month, SAB made an open appeal to Mboweni to “tax beer responsibly”.

In a video, SAB highlighted the potential impact of a tax increase on farmers supplying the alcohol industry, saying a “responsible tax” supports jobs in rural communities.

SAB is the maker of Carling Black Label and Castle Lite beer, among other alcoholic beverages.

“SAB buys from more than 1,000 farmers locally. The majority are emerging black female farmers. When you tax beer responsibly, it supports jobs in rural communities,” SAB said.