INSIPID days may be ahead for the sugar industry, as the proposed date for a tax on sugar-sweetened beverages looms.With producers, such as Illovo and Tongaat Hulett, already showing strain amid a severe drought and weak local economic conditions, the possibility of a drop in sugar consumption could be too much for the sector to bear.Finance Minister Pravin Gordhan announced in his budget speech that the tax could come into effect from April 1 2017. The 20% tax will apply to all nonalcoholic sugar-sweetened beverages, such as still and carbonated soft drinks, fruit juices, energy drinks, iced tea and cordials.Absa economists said the tax could lead to a decline in sugar usage, which would drop the price of sugar, and thus affect the industry negatively.Other JSE-listed companies that stand to be affected include Tiger Brands, Pioneer Foods, Bowler Metcalf and SABMiller.Tiger owns brands such as Oros and Energade. Pioneer Foods has exposure through Liqui-Fruit, Ceres and Fruitree; wh...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.