Photo by: Bloomberg
The South African Sugar Association (Sasa) has called on the National Treasury to reconsider its intention to introduce a tax on sugar sweetened beverages (SSBs) by April next year, saying that, not only will it have an adverse effect on the beverages industry, but also widespread ramifications in the agriculture sector.
Sugar growing and milling activities employ 85 000 people directly, while contributing 350 000 indirect jobs.
Speaking at a media briefing in Rosebank, on Tuesday, Sasa chairperson Rolf Lütge said upstream and downstream industries, including contractors, transport, warehousing, packaging, wholesale and retail, would also be impacted, which would affect employment rates.
It is estimated that at least one-million people are dependent on the activities to supply sugar to the domestic market.
The sugar industry supplied about 620 000 t/y to the SSB sector, making it the largest sector for sugar sales. Sasa also estimates that more than 100 000 ha of cane are necessary to meet this supply.
Also speaking at the event, vice-chairperson Suresh Naidoo said the agricultural segment of sugar production was already under significant stress, with about 38 797 ha of cane lost to drought and rising costs between 2000 and today.
Area under cane in South Africa was currently 382 840 ha; however, the 38 797 ha lost equates to the loss of 2.1-million cane and 9 000 rural jobs linked to sugarcane growing.
“This tax will be the straw that breaks the camel’s back,” said Naidoo.
SUGAR AND HEALTH
Meanwhile, Sasa refuted the argument that the introduction of the tax would result in reduced obesity levels in the country, noting that there was “no scientific evidence” to back these claims.
Further, Sasa noted that no studies have demonstrated a link between imposing taxes on SSBs and the desired outcome of reducing obesity.
As such, the association asked that the implementation of the tax be deferred until a full assessment by various stakeholders, including the Consumer Goods Council and the Department of Health, of the causes of obesity and noncommunicable diseases had been undertaken.
Sasa hopes to eventually undertake a local consumption study aimed at measuring what South Africans eat and how it affects their health. This discussion, Sasa says, has been ongoing for two years owing to the first estimate of the study being “too astronomical” and it subsequently being reviewed.
However, government argued that drinking one to two SSBs a day increased an adult’s likelihood of being overweight by 27% and by 55% in children, while increasing the risk of developing type 2 diabetes, adding that the tax could save up to R10-billion in the next 20 years on money spent treating obesity, type 2 diabetes, heart conditions and cancer.
Lütge highlighted that while sugar consumption in the US, the UK and Australia had declined in recent years, the obesity prevalence had been rising, which meant that singling out one ingredient, such as sugar, was unlikely to be a solution.
According to the World Health Organisation, about 74.1% of the US’s population is obese, but an analysis from 2011 showed that the country’s sugar consumption had fallen by 20% from 1980.