Legal wine flounders as illicit alcohol triumphs

Sin taxes have again increased this year, serving a blow to the wine industry. Finance Minister Enoch Godongwana announced in his 2024 budget that tax revenue for 2023/24 was R56,1 billion lower than estimated in the 2023 budget. This was due to lower-than-expected economic performance.

- Lindi Botha

Godongwana announced above-inflation increases on excise duties, which translated to an increase of R0,28/bottle of wine; R0,47/bottle of fortified wine; R0,89/ bottle of sparkling wine; and R5,53/bottle of brandy (see FW, 8 March).

While increasing sin taxes like those on liquor and cigarettes is par for the course each year, the wine industry has suffered numerous challenges during the last two years.

South Africa Wine (SA Wine) therefore called for inflation-linked increases on taxes, pointing to low profitability levels in the industry.

Research from the South African Wine Industry Information and Systems showed that the number of farmers operating at a loss had increased from 27,9% in 2018 to 39% in 2022.

Since 2007, vine uprootings have exceeded plantings annually.