Any Sugar Tax Increase or Lowering of Threshold Would Sound The Death Knell for Sugar Industry
The country’s sugar industry, as represented by the South African Sugar Association (SASA), strongly rejects calls for an increase in the Health Promotion Levy (HPL), commonly known as the sugar tax. Increasing the sugar tax would decimate sugarcane farmers including the 24 000 small-scale growers, and precipitate further closures of sugar mills, with two already permanently shut down (due to HPL) in KwaZulu-Natal.
“Any increase in the sugar tax would literally undo all the progress and reverse the gains made under the all-important Sugarcane Value Chain Master Plan to 2030. This would spell unprecedented disaster for the industry,” said Advocate Fay Mukaddam, Independent Chairperson of SASA. A recent credible study conducted by the highly regarded Bureau for Food and Agricultural Policy (BFAP), an independent agricultural consultancy, has revealed there would be dire ramifications for the industry if the sugar tax were to be increased or the threshold lowered.
“These calls (for sugar tax increase) are basically designed to trick Treasury into defying President Cyril Ramaphosa, who recently asseverated that, in the State of the Nation Address, his administration was finalising an industrial policy to drive economic growth by focusing on localisation, diversification, digitisation and decarbonisation. Currently, the industry is on the cusp of diversification, hence our plea to government to extend the current sugar tax moratorium to 2030, thereby aligning it with the Master Plan. Our core focus right now is the ‘Reimagined Cane Industry Strategy’ wherein we are moving away from being a sugar-based industry to becoming a sugarcane-based industry. In this phase, we are robustly pursuing diversification to secure the sustainability of the industry. So far, we have conducted scoping and pre-feasibility studies pertaining to identified product diversification opportunities such as sustainable aviation fuel, bioethanol and polylactic acid. Through the Master Plan processes, we continue to work together with government and other critical stakeholders to future-proof the existence of the industry,” said Advocate Mukaddam.
The industry is also concerned about the prevalence of the non-communicable diseases (NCDs) in South Africa, and it is a matter that needs to be taken seriously. However, a simplistic approach will not work as this is a complex matter. What is needed is a holistic and measured approach, not a punitive mechanism which demonises certain food substances such as the case with sugar. As such, the yet-tobe-released results of the total dietary intake study, which was conducted by government, are key in determining what is contributing to NCDs. A science-based approach is critical in seeking to find effective and lasting solutions. For now, there continues to be no credible studies showing that the sugar tax has led to the intended decrease in obesity and diabetes. To the contrary, the recent findings from the National Food and Nutrition Security Survey in 2023 highlight an increase in obesity trends compared to those reported in 2016.
ISSUED BY SASA EXTERNAL AFFAIRS DIVISION
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