A quarter-million jobs, one budget line: Why inflation-linked beer excise makes economic sense

Somewhere between a barley field in the Free State and a cold draught served at a tavern in Tembisa, a quarter of a million South Africans earn their living. 

They are farmers and maltsters, factory workers and truck drivers, packaging engineers and small business owners, waiters and craft brewers.

They work across one of the most geographically dispersed and employment-intensive value chains in the country's manufacturing economy — and every one of their livelihoods is connected, directly or indirectly, to a single line in the National Budget: the annual adjustment to beer excise duty.

That connection is what makes the 2026 excise decision so consequential. Beer's economic contribution extends well beyond the breweries themselves. 

Independent assessments have estimated that the value chain supports upward of 250,000 jobs when direct, indirect, and induced effects are counted, generating fiscal contributions across excise, VAT, corporate income tax, and personal income tax at every node. 

These are not abstract multiplier estimates. They are visible in the workers hired when barley is planted, in the aluminium and glass plants that run production lines for cans and bottles, in the logistics firms that move product to market, and in the township tavern owners and craft taproom entrepreneurs who represent the final link between producer and consumer. 

The chain is broad, it reaches deep into communities where formal employment is scarce, and it is sensitive to policy signals — particularly the price signals embedded in excise adjustments.

It is in this context that the beer industry makes the request ahead of the Budget: align the beer excise adjustment with projected inflation. 

This framework was designed around a sound principle — that real tax burdens should remain stable over time rather than escalating through repeated above-inflation increases — precisely because Treasury recognised that predictability protects the legal tax base, supports long-term revenue stability, and avoids the unintended market distortions that follow when producers and consumers absorb consistently variable tax shocks by way of price.

Honouring that principle in 2026 is not a concession to industry. It is an affirmation of policy discipline that serves the fiscus, and consumers and the economy.

The beer industry is not asking for special treatment. We ask for nothing more than adherence to Treasury's excise policy principles and the evidence that informed them. 

The alternative would be another round of above-inflation increases that shrinks the legal market, pressures small producers, expands the illicit economy, and delivers less revenue than projected—a policy choice that satisfies no objective well. 

An inflation-linked beer excise adjustment does all of that. An above-inflation increase does the opposite.

Author: Charlene Louw, CEO, Beer Association of South Africa