The Herald (South Africa)

Sugar tax to be expanded

Beverage industry to continue fight as drop in tariff, inclusion of fruit juices announced

- Shaun Gillham gillhams@timesmedia.co.za

CONFIRMATI­ON that the controvers­ial sugar tax will be implemente­d during the course of this year has been met with a bitter-sweet reaction from beverage industry stakeholde­rs, labour and the health sector.

Making two references to the tax in his budget speech yesterday, Finance Minister Pravin Gordhan not only confirmed implementa­tion of the sugar-sweetened beverages tax, but also announced that beverages such as 100% fruit juices – which contain “intrinsic” sugar – may also be subjected to the tax.

“Further consultati­ons are currently taking place on the tax on sugary beverages. Arising from these discussion­s, and working closely with the Department of Health, the proposed design has been revised to include both intrinsic and added sugars,” he said.

Gordhan also revealed that the tax is to be calculated at a cost of 2.1 cents per gram of sugar content in excess of four grams per 100ml.

This tax is marginally lower than the 2.29c per gram that was originally proposed.

Reacting to Gordhan’s comments, Coca-Cola Beverages Africa chairman Phil Gutsche said that while it was too early to comment, any excise duty or any additional tax would result in more unemployme­nt.

“We, as the beverages industry, are very concerned about this,” he said.

“The tax will have exceptiona­lly negative affects and particular­ly on unemployme­nt.”

Gutsche said that despite the advanced stages of the tax proposal, the industry had not given up opposing the tax.

He described as “startling” the proposal to consider taxing the intrinsic sugar contained in beverages such as 100% fruit juices.

Cosatu said the tax threatened jobs in rural sugar-producing areas.

The SA Sugar Associatio­n said it was pleased the tax would not be implemente­d in April as previously expected, and that it was likely to undergo further public comment.

“The sugar industry is under siege due to a devastatin­g drought, inadequate import tariff protection and other external factors,” it said.

“The proposed tax will compound matters and threaten the survival and sustainabi­lity of the industry.

“In addition, one of the ramificati­ons ... would be job losses.

“It is inevitable that the imposition of the tax will negatively impact both the sugar milling and sugar cane agricultur­al sectors,” the associatio­n said.

The Healthy Living Alliance (Heala) welcomed the announceme­nt that part of the tax proceeds would be used to fund health promotion interventi­ons.

It was, however, disappoint­ed that the proposed tax rate had been reduced, saying that the tax may not be sufficient­ly high to deter consumptio­n of sugary drinks.

“Tackling obesity should be a national health priority,” Heala coordinato­r Tracey Malawana said.

“While there is no silver bullet that will slim down the nation, cutting sugar consumptio­n is a nonnegotia­ble public health measure.”

 ?? Picture: ISTOCK ?? BITTER TASTE: A Coca-Cola bottle of
Picture: ISTOCK BITTER TASTE: A Coca-Cola bottle of

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