The South African alcohol industry has urged the National Treasury to link new excise levies to consumer price inflation and incentivize production of lower-strength alcoholic drinks to address abuse and social harm.

During a virtual stakeholder meeting, industry representatives highlighted concerns that proposed excise duty increases could exacerbate illicit trade and financial strain on consumers.

Diageo's Sibani Mngadi emphasized the need for equitable tax reforms, warning that further spirits tax hikes risk accelerating reliance on unregulated alcohol.

The Treasury acknowledged the complexities of reformulating high-volume beverages like wine but proposed a progressive excise framework to balance public health goals with industry viability.Heineken's Carmen van Niekerk cautioned against disproportionate impacts on the wine sector, citing potential losses of R1.5bn annually.

Industry experts called for CPI-linked tax adjustments to ensure predictability and stability, while academics noted successful precedents like the UK's lower-strength alcohol incentives.The debate underscores tensions between fiscal policy, public health, and economic equity in South Africa's alcohol taxation landscape.