Maltabella discontinuation highlights impact of VAT on SA's sorghum industry

With the discontinuation of Maltabella, Octavia Avesca Spandiel reports on how value-added tax has hindered sorghum’'s affordability and competitiveness.

- Octavia Avesca Spandiel

The discontinuation of Bokomo Maltabella in November 2024 sparked discussions on economic policy, nutritional security and the preservation of indigenous crops. Sorghum, the key ingredient in Maltabella, has long been a staple in South Africa. Its valued for its resilience in drought-prone areas and its cultural significance in traditional foods and beverages. However, unlike other staple grains, sorghum-based products are subject to value-added tax (VAT), which impacts affordability and competitiveness in the market.

Speaking to Farmer’s Weekly, Lesedi Mokoena, agricultural economist intern at the National Agricultural Marketing Council, said while Pioneer Foods (PepsiCo), which owns the Bokomo brand, did not explicitly cite VAT as a reason for discontinuing Maltabella, the tax burden likely contributed to pricing constraints.

“In a market dominated by VAT-exempt cereals like maize porridge and wheat-based cereals, VAT increases production costs, affecting both manufacturers and consumers. Over time, this financial pressure may have made Maltabella economically unsustainable despite strong demand,” she said.