DENZEL SWARTS: What is the Western Cape without wine?

Someone once said the next generation of SA winemakers is not just producing new and exciting wines; they are cultivating change, transforming a sector once regarded as the domain of the elite.

Ever since the first black South Africans started graduating in winemaking from Stellenbosch University in 1995, the tendrils of hope have been nurtured and the children of farmworkers have been able to dream bigger dreams of a better future. Now, our wine farms are at a critical juncture that threatens this transformation and the entire industry: an increased excise tax has been proposed by finance minister Enoch Godongwana.

We recognise the National Treasury intends to use the proposed tax to address public health issues of excessive alcohol consumption, but it will result in dire unintended consequences. The wine industry wants to collaborate on initiatives that encourage responsible consumption and sustainable practices. This is why it is vital we examine the intended and unintended consequences of such policy measures on our economy, employment and cultural heritage. We ask policymakers to work with us to create solutions that balance public health goals with sustainable economic transformation.

The SA wine industry is a national treasure that supports more than 270,000 jobs and contributes R56bn to the economy each year. It provides significant seasonal employment for 12,000-14,000 individuals, alongside about 80,000 full-time employees. The proposed increase in excise tax is at a significant premium to current inflation and will substantially increase the cost of a bottle of wine, at a time when we are all facing a significant rise in the cost of living across a basket of goods. This will have a huge impact on demand for wine, which inevitably will lead to job losses across the value chain, from vineyard workers to bottlers and distributors, and in tourism and infrastructure development.

The Western Cape’s wine estates drive tourism growth and have become a globally recognised tourist destinations, blending agriculture and cultural heritage. SA wines are earning global awards, attracting more tourists. Our wine tours and experiences are relatively affordable, allowing seasoned travellers and newcomers to explore the region’s offerings.

In 2023, for example, US visitors increased by about 25% from 2022. This surge led to new airport infrastructure investment, creating a growth cycle: better facilities attract more airlines, bringing more visitors to the Cape’s wine regions. The Mother City’s recognition through the Time Out Best City Award 2025 highlighted the city’s appeal and cited wine tourism as a significant draw. This raises an important question — would Cape Town be as attractive without its wine industry?

Cape Town is, without reserve, the best starting point for visitors due to its airport and tourist facilities that make it easy to access the wine lands. You can easily go from city life to vineyard tours in Constantia, Stellenbosch, Franschhoek and the Hemel en Aarde valley (not to mention the spread of wine-growing regions throughout the country). Being close to Cape Town, these local wine regions allow mixing city fun, historical sites and beach relaxation with vineyard visits.

If implemented, the proposed tax hike could lead to multiple farm closures, compromising Cape Town’s position as a gateway to wine regions. A declining wine sector will diminish the region’s appeal as a tourist destination, devastating local hospitality and service businesses.

We should learn from the Australian wine industry, which faced similar challenges with tax increases in the early 2000s, leading to the closure and consolidation of numerous smaller vineyards, reduced export competitiveness and a shift towards cheaper imported wines. This could happen here.

The government’s efforts to address excessive alcohol consumption are important, but it is crucial to consider the broader economic effect of the proposed excise tax on wines. Yes, there may be a short-term increase in tax revenue for the Treasury, but in the long term we will see a significant reduction in overall tax collection from reduced corporate tax from struggling businesses, lower personal income tax from job losses, and decreased tourism-related revenue.

I am a third-generation farmworker; I grew up on a farm and never had the money to go and study winemaking. But, importantly, I had the hope instilled in me that I could be more. I was not alone in thinking this. There are others who have broken through that elitist barrier. Unfortunately, the proposed tax could reverse much of this transformation.

We are acutely aware of how capital-intensive farming is and how unsustainable the profit margins are as we struggle with the effects of climate change, rising costs and logistical challenges. This tax increase only adds to these challenges. We know, too, that many children of farmworkers share my dreams of being more than labourers and whose love of the land and of farming means we want to see it thrive and grow. We want it to remain part of our future dreams.

The proposed excise tax increase would have a disproportionate effect on the wine industry. It risks harming an industry that contributes significantly to SA’s cultural heritage, stifling these dreams and reversing the transformation so long in the making. The tax will hit our economy and threaten the employment and livelihood of many. A more balanced approach, including combating illicit trade, supporting compliant producers and considering all stakeholders’ interests, would better serve our shared goals of a healthy, prosperous society.

• Swarts is sales and brand executive for Zoetendal and River Estate in Elim Cape Agulhas. He also spearheads the development of social response support for rural and vulnerable youth.