|Wine producers will be further brought to their knees by the latest hike in excise duties that was announced by the Minister of Finance.|
|Producers had to absorb substantial excise increases over the past few years despite serious financial strain, and the latest hike of 8.4% on natural wine and 10% on spirits – which includes the important brandy category – will be a vital blow to many wine producers.
The wine industry noted with disappointment and concern that its critical situation and pleas were not taken into consideration, despite ongoing discussions with Government. The hikes amount to nearly double the inflation rate, while fortified wine will increase by 7.4% and sparkling wine by 4.5%.
The fact of the matter is that proper control over illegal liquor distribution could have resulted in substantially lower increases. This while Government already earns more income from wine products through excise duties and VAT than the producers themselves – certainly not a sustainable situation either for Government or the industry.
These increases mean that in the case of brandy, Government earns almost R400 from excise duty on each case of brandy sold in the retail market (12 x 750 ml).