Some residents expressed shock while others supported the alcohol and tobacco price hike that was announced by Tito Mboweni, Minister of Finance, in the budget speech on Wednesday, 24 February.
Mboweni said that drinkers and smokers will be paying 8 percent more for their choice of drink and tobacco product. He said: “It is clear that excessive alcohol consumption can lead to negative social and health outcomes. Consumers do react to price increases, and higher prices should lead to lower consumption of alcohol products with positive spin-offs.”
Some residents did not take the news well while others said they were not affected. Cindy Handman, a Glenashley resident said that it won’t make any difference to her. “I only buy a few bottles of wine when I have guests coming over. But, other than that I fully support the price hike,” she said.
Desmond Ngidi, a vagrant said that the alcohol and tobacco price hike is unnecessary. “When you have a drinking or a smoking problem, you’re going to find the money from somewhere. It doesn’t matter how much they increase it,” he said.
“Coming out of a hard lockdown we were paying an arm and a leg just for a packet of cigarettes. We were thinking that things are finally getting back to normal. Now ‘boom’ the price of cigarettes goes up which is very unfair,” said Sthembile Gumede, a smoker.
The South African Liquor Brand Association (Salba), in a statement said that the alcohol industry is gravely concerned with the inflation increases to excise tax. Kurt Moore, CEO of Salba said: “With thousands of businesses across the value chain looking into the financial abyss due to the three sales bans over 12 months totalling R36 billion in revenue losses, there is no contingency for tax increases forcing further drastic action to cut costs. We will see tens of thousands of job losses within the sector whose livelihoods cannot be sustained.”
Sinenhlanhla Mnguni, chairperson of the Fair-Trade Independent Tobacco Association (FITA) said that the association was disappointed about the decision by the National Treasury during his budget speech to impose an 8 percent increase in the excise duties levied on both alcohol and tobacco products. “This despite the compelling evidence that increase excise taxes for the two industries have resulted in a booming illicit trade. Currently we are seeing a local legitimate tobacco industry that is heavily regulated without any protection being offered to these legitimate local enterprises, while rogue elements continue to run amok,” said Mnguni.
