As the Minister of Finance, Enoch Godongwana, invites public input ahead of the National Budget, the South African Liquor Brand Owners Association (SALBA) is urging government to implement an immediate freeze on excise increases for spirits — a move it says could help recover billions lost annually to illicit trade.
According to a study conducted by Euromonitor International, illicit alcohol trade cost the fiscus an estimated R16.5 billion in 2024. Of that, spirits alone accounted for R10.5 billion (66%), with illicit spirits making up more than half (53%) of all illicit alcohol sold in South Africa.
SALBA argues that the current excise burden on spirits — now exceeding National Treasury’s 36% tax incidence target — is inadvertently fuelling the illicit market. A freeze on further increases would give legitimate producers the opportunity to reclaim market share, protect jobs and stabilise excise revenue collection while longer-term enforcement measures take effect.
The association has welcomed the additional R7.5 billion allocated to SARS over the medium term to combat illicit trade, particularly in the alcohol sector. It also notes that in the 2025 Medium Term Budget Policy Statement, Minister Godongwana acknowledged that illicit alcohol and cigarettes are costing the country billions in uncollected taxes — funds that could help close the revenue gap and avoid broader tax increases.
Furthermore, in his recent State of the Nation Address, Cyril Ramaphosa reaffirmed government’s intention to clamp down on illicit alcohol trade. SALBA cautions, however, that excessive excise hikes on spirits may unintentionally strengthen illicit operators rather than curb them.
SALBA is available for interview to unpack:
* The link between excise policy and illicit trade growth
* The fiscal impact of illicit spirits on South Africa’s revenue base
* Why an excise freeze could deliver immediate relief while enforcement ramps up
* The industry’s commitment to working with government and law enforcement