Double the Pain: The Burden of Unpredictable Excise Taxes & High Inflation on Beer Producers & Consumers in South Africa
Commissioned by the South African Breweries (SAB)
The report analyses the evolution of South Africa’s excise regime on beer and the performance thereof since 2012/13 within domestic inflationary circumstances, in relation to the government’s tax burden targets, and against key global counterparts. In doing so, the adverse impact of unpredictable excise taxes on beer producers and consumers within high-inflation environments are assessed, while South Africa’s duties, excise revenues, and overall tax burdens on beer are evaluated and benchmarked to a selection of international comparator countries.
This study answers the following questions for South Africa:
- How has cost-push and demand-pull inflation affected the supply of and demand for beer?
- How responsive are excise payments by beer producers to economic conditions (i.e., beer excise tax buoyancy) considering the interplay of taxes, inflation, and economic growth in high-inflationary environments?
- How sensitive have consumers become to changes in beer prices (i.e., price elasticity of demand for beer)?
- What is the composition of fiscal receipts from excisable products and how reliant is the government on excise payments by beer producers?
- How have excise duties on beer progressed over time relative to projected and actual inflation outcomes?
- Have above-inflation excise duty escalations negatively affected beer producers and consumers?
- Have above-inflation excise duty increases affected the responsiveness of excise revenues for the government and beer consumption?
- How has the excise and overall tax burden on beer compared to the government’s official targets and against the beer tax burdens of five international benchmark countries?
- How does South Africa’s excise regime on beer compare to a selection of international comparator countries?
- Can an inflection point be reached where the cost burden of unpredictable duty increases on beer stifle industry growth, diminish excise revenue collection potential, and exacerbate socio-economic challenges?
The experts behind the research
Our Africa Consulting team include specialists in quantitative economic analysis, working with clients around the globe and across sectors to build models, forecast markets and evaluate interventions using state-of-the art techniques. Lead consultants on this project were:
Deon Fourie
Lead Economist, Africa Consulting
Pieter Scribante
Senior Economist, Africa Macro
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