Sugar tax threatens thousands of jobs, says South African beverage industry

South African beverage industry has come out to oppose the proposed sugar-tax on sweetened beverages in the country, which the government announced earlier in the year and that is expected to come into effect on April 1, 2017. The group said the tax will lead to thousands of industry-wide job loss if implemented.

Speaking at a press conference on  Tuesday, Phil Gutsche, Chairman Coca-Cola Beverages Africa (CCBA), said that the proposed tax would lead to a loss of 60,000 jobs in the beverage industry.

“If this tax proceeds, we stand to lose 60,000 jobs in our industry. More than 5,000 livelihoods will be affected in Nelson Mandela Bay alone,” he warned.

The poor will therefore literally become poorer and not thinner as a result of this proposed tax,” he said.

He called on the Eastern Cape Province and the Nelson Mandela Municipality to support the beverage industry in opposing the tax on Sugar-Sweetened Beverages (SSBs).

Gutsche was joined in the call by a major shareholder of Coca-Cola Beverages Africa, Steven Dondolo and the Beverage Association of South Africa (BevSA), among other stake holders.

Our industry supports the livelihoods of 14,000 people in this city and many more in the province. Nationally, we support more than 200,000 jobs.”

South Africa’s Finance Minister, Pravin Gordhan announced in his February budget a proposal to introduce what amounts to a 20% tax on Sugar-Sweetened Beverages (SSBs). The tax is meant to help fund the health department’s prevention of excessive sugar intake by the country’s population. South Africa is ranked as having the highest obesity rate in Sub-Saharan Africa. According to the country’s Treasury data, 55% of South Africans (42% women and 13% men) are overweight.

BevSA said that 97% of South Africa’s obesity problems had nothing to do with sugar-sweetened beverages, claiming they accounted for only 3% of daily kilojoule intake.

“There are better ways to achieve the government’s goals”, the association’s spokeswoman said.

“Voluntary reformulation, packaging, labeling and other targeted commitments, already adopted in South Africa, will result in greater impact on tackling obesity than the anticipated reduction of only 37 kilojoules a day because of a tax,” she said.

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