You are here: Home News & Events Press release: Alcohol taxes – too little to be effective

Press release: Alcohol taxes – too little to be effective

Cape Town and Johannesburg were ranked number three and number five in a 2018 Deutsche Bank study of the 50 cities with the cheapest beer. The increase of 12 cents will probably make our cities the number 1 in the world for the cheapest beer! And the budget speech said nothing about the social and economic impact of alcohol-related harm.

As usual, the Minister of Finance (and press reports before and after the Budget speech) talked about increases in excise tax on alcohol and tobacco as ‘sin’ tax. Unfortunately, the Minister’s ‘apologetic’ reference to increases in excise tax on these products underplays the crisis we are facing. SAAPA expected the Minister to announce at least an increase of 20% in excise taxes on alcohol products given the extent of alcohol-related harm in our society. Furthermore, SAAPA would have expected the Minister  to announce that at least some of that revenue would be spent on preventative measures to reduce consumption and promote safer drinking. Treasury should be working closely with the Departments of Health, Education, Trade and Industry, Sports, Social Development, and Transport and Communication to ensure that South Africa takes a preventative approach, so that we reduce expenditure on alcohol-related harm and of course actual alcohol-related harm  in our society.

South Africans are ranked in the top five of consumers in the world with a particular habit of binge drinking. In the International Alcohol Control Study of adult drinkers in 2017 in Tshwane, it was found that 53% of participants could be classified as heavy drinkers (8 drinks for men and 6 drinks for women in one occasion) and 93% of the absolute alcohol (in litres) was consumed in heavy drinking occasions. The 2018 WHO Global Status Report on Alcohol and Health reported that of those in South Africa aged 15-19 who drank alcohol, 74% of males engaged in heavy episodic drinking in 2016, while the figure for females was 34%.

The Department of Health reports that interpersonal violence amongst men in South Africa is the 2nd leading cause of death and injuries amongst 15 to 44-year-old men, with almost 50% of these being alcohol-related. A 2014 study by KMPG also estimated that Gender-Based Violence, and in particular violence against women, cost the South African economy between R28.4 billion and R42.4 billion, or between 0.9% and 1.3% of gross domestic product (GDP) in the 2012-2013 financial year. Both local and international studies have identified that the higher the amount of alcohol consumed by male partners, the higher the level and frequency of violence experienced by women. 171 people die in South Africa every day in alcohol-related harm.

In 2015 alone, South Africa spent over R143 billion on road crashes and injuries. The total figure for annual government spend on alcohol-related harm is over R247 billion - almost double the allocation for ensuring that resource poor students are able to obtain tertiary education.

The 12c increase on beer will not make any contribution to offset these costs, nor will it address the social and health devastation caused by alcohol consumption.

The World Health Organisation (WHO) and leading academics have determined that a meaningful increase in the price of alcohol products results in a decrease in demand, alcohol consumption and consequently a decrease in alcohol-related harm.

SAAPA calls on the Minister of Finance to prioritize alcohol-related harm and increase the excise taxes substantially so that there is a real increase in the price of alcohol and a meaningful reduction in consumption and alcohol-related harm.

In a study in 2017, commissioned by the National Economic Development Labour Council (NEDLAC), Genesis Analytics found support for the public health arguments that improved regulation and changes to legislation would be beneficial for the overall health of the population.

The report supported the adoption of the proposed National Liquor Amendment Bill of 2017 with specific reference to the provisions related to restricting advertising, increasing the legal drinking age to 21 years, changing licensing requirements, and extending liability to manufacturers.  According to the report, restricting advertising and increasing the legal drinking age would result in:

  • A saving in government spending of between R 0.7b and R 1.9b (including savings on government spending on public health of between R 0.3b and R 0.73b)
  • A reduction in the number of binge drinkers aged between 15 – 20 year olds of between 84 000 and 194 000
  • A reduction of 290 000 (7.5%) in the number of binge drinkers 
  • A saving of at least 185 lives per annum as a result of a reduction in alcohol-related road traffic fatalities, HIV transmission, crime, violence and gender-based violence

The economic and social impact of increasing the price of alcohol and adopting the National Liquor Amendment Bill is clear – the government will save money and the quality of life of South Africans will improve.

The budgetary emphasis on investment in education will have little impact if young people continue to drink in the way they do. The Valentine’s Day incident in  Claremont in Cape Town is a case in point. 1 200 learners were involved in an alcohol-induced fight in which five learners were stabbed. There are several issues here that are a cause for concern: huge numbers of children and learners were out of school during school hours, seemingly with the knowledge and permission of school management; a social event of questionable value took precedence over learning; no controls were in place to prevent children and young people from accessing and consuming alcohol. This is a clear example of the regulatory system failing and creating risk for the young people of our country.

SAAPA SA calls on Treasury to prioritise alcohol-related harm and develop a mini-budget dedicated to this public health crisis.

SAAPA SA calls on the Department of Health to release the Control of Marketing of Alcoholic Beverages Bill of 2013 to the public for comment. Let’s make it less attractive for children and young people to think drinking is cool!

SAAPA SA also call on the Department of Trade and Industry and Cabinet to urgently facilitate the adoption of the National Liquor Amendment Bill of 2017 so that we can reap the health, economic and social benefits of alcohol regulation.

comments powered by Disqus