South Africa: South African Sugar Industry Crushed by Not So Sweet Tax

A tax on sugary beverages that went into effect in April 2018 is straining the South African sugar industry. Adding to the pressure, in February 2019, the Minister of Finance announced a 5 percent increase in the tax on sweetened beverages from 2.1 cents to 2.21 cents per gram of sugar content that exceeds 4 grams per 100 ml. The “sugar tax” impacts both domestic and imported beverage products equally, and is causing negative impacts to the beverage and sugar sectors in South Africa. The sugar industry’s revenue is expected to decrease by up to R1.8 billion (US$129 million) in the 2018/19 MY. However, there may be opportunities for U.S. exporters of alternative sweeteners, and beverage exporters who can supply the health foods market or are able to reformulate their products to the sugar content threshold of less than 4 grams per 100 ml.

South Africa: South African Sugar Industry Crushed by Not So Sweet Tax