#BUDGET2017
Higher excise duties another blow to embattled wine farmers
Producer body says the industry will find it difficult to absorb the increase in excise duties on wine and brandy announced in the 2017-18 budget
Wine producers say the increase in excise duties on wine and brandy announced by Finance Minister Pravin Gordhan in his budget speech on Wednesday is a heavy blow for the sector as it continues to struggle to make significant profits. Gordhan announced in his budget speech in Parliament excise increases of 8.8% on wine and sparkling wine, and 8.5% on spirits. Since the implementation of the current excise regime in 2002, tax rates on most alcoholic beverages have consistently increased above inflation annually, according to the Treasury’s budget review document. Rico Basson, MD of wine producer body VinPro, said: "In a depressed economy where wine retail price increases are below inflation, wine producers and cellars will find it difficult to absorb these increases. "The South African wine industry understands government’s economic challenges, however, the above-inflation hikes in wine and brandy excise will be challenging for producers and cellars to absorb."
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