SA’s beverage industry mulls on opposing tax on sugar sweetened drinks

SA’s beverage industry mulls on opposing tax on sugar sweetened drinks

THE beverage industry in the Eastern Cape on  (yesterday) Tuesday called on the Nelson Mandela Bay Municipality and the provincial government to help in opposing the National Treasury’s proposed tax on sugar-sweetened beverages.

Coca-Cola Beverages Africa chairperson, Phil Gutsche, said the proposed tax would threaten thousands of livelihoods and economic growth in the province and the city.

This comes after Treasury published a policy paper last month on a proposed 20 percent tax on sugar-sweetened beverages to take effect April 2017, in a bid to curb non-communicable diseases like diabetes and hypertension.

Gutsche argued that the beverage industry supported the livelihoods of 14 000 people in Nelson Mandela Bay and many more in the province, saying the poor would carry a disproportionate burden and receive little benefit.

“Nationally we support more than 200 000 jobs. If this tax proceeds, we stand to lose 60 000 jobs in our industry. More than 5 000 livelihoods will be affected in Nelson Mandela Bay alone,” Gutsche said in a statement.

“The poor will therefore literally become poorer and not thinner as a result of this proposed tax.”

Gutsche was supported in his call by BevSA executive director, Mapule Ncanywa, who said that 97 percent of South Africa’s obesity problems had nothing to do with sugar-sweetened beverages, which accounted for only three percent of daily kilojoule intake.

Ncaywa said voluntary reformulation, packaging, labelling and other targeted commitments already adopted in South Africa, would result in greater impact on tackling obesity than the anticipated reduction of only 37 kilojoules a day because of a tax.

“There are better ways to achieve the government’s goals,” Ncanywa said.

Ncanywa said the beverage industry was strongly committed to South Africa’s economy, with plans to invest in opening 30,000 new outlets and creating 60 000 new jobs over the next five years.

She said if the industry continues to grow, its contribution to tax receipts would quickly outpace expected revenues from the sugar-sweetened beverages tax.

Little Green Beverages director, Glenn Sheppard, said this meant that they would have to reconsider a significant investment in the extension of their Buffalo City plant, which would have added an additional 70 direct jobs, and that they would have to cut back marketing spend nationally by approximately R50 million.

Twizza financial director, Nico de Jage,r said that even in a small town like Queenstown, the proposed tax could wreak havoc, making up to 815 people dependent on the state for their income and sustenance. – ANA