SA alcohol industry can stimulate — or slow down — investment
Consistent excise tax policy in the alcoholic beverages sector is critical for the country’s economic growth
Tax policies are a major indicator of the policy direction of a country and one of the major considerations by investors in determining a potential return on their investment. Excise tax applied on alcoholic beverages and other commodities, and adjusted accordingly during annual budget speeches by the finance minister, is one such a tax that can either stimulate or slow down future investment. As with other sectors, the alcoholic beverage sector has been affected by elevated levels of global volatility with a major impact on emerging markets. The short-term outlook for SA remains poor — medium-term recovery is set to lag the rest of Africa with a projected growth of about 1.5% for 2017. Economic pressures have seen consolidation and re-organisation of the global alcohol industry with a direct effect on the South African market. In September last year, we saw a completion of an estimated R1.9-trillion deal in the takeover of SABMiller by global beer maker Anheuser-Busch.
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