Wine industry must change approach to lobbying against sin tax

The meaningful and secure participation of black players in wine production will enable the industry to renew its call for government to align excise duties on wine with inflation, writes Dr Sifiso Ntombela.

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The wine industry is one of the largest in the South African agriculture sector in terms of its contribution to the sector's employment, gross production value, and foreign earnings.

In addition, the industry plays a crucial role in the growth and sustainability of tourism in the Western and Northern Cape. In 2023, the industry was estimated to have contributed nearly 1,2% to government revenue.

Contextualising this within the ambit of the ongoing government budget challenges, if government were to double the size of the wine industry, it could raise the same amount of revenue it intended to generate from the VAT increase.

CREATING NEW OPPORTUNITIES

Doubling the size of the wine industry might be ambitious, but not impractical, if the industry considers new opportunities emanating from the changing climate that has made other provinces suitable for wine production.

Like most of South Africa's agricultural industries, the wine industry's lobbying strategy is based on a trickle-down economic effect to solicit government support and tax cuts.

The wine industry employs 270 364 people and produces 935 million litres from 89 384ha. It also contributes to the excise duties charged on 486 million litres of wine consumed locally per year.