Not so sweet for sugar

The South African sugar industry has been hit by high levels of dumped imports, a higher sugar tax and the prospects of additional products being subject to this tax.

In his February budget, South African finance minister Enoch Godongwana increased the sugar tax from 2.21 to 2.31 cents per gram. The tax, known as the health promotion levy, is aimed at reducing obesity, particularly among children.

However, the sugar producer organisation SA Canegrowers maintains that the tax has cost thousands of jobs while there is no evidence that it is achieving its objective. In a statement after the budget speech, the association said the tax increase would deepen the industry crisis and threaten thousands more rural jobs.

In a new development this week, the Treasury indicated that it was considering extending the sugar tax to 100% fruit juices, which are naturally sweet but contain no added sugar. It said there was a high concentration of sugar in a serving, “resulting in the same impact as sugar sweetened beverages.”

Sugar producers must feel the walls are closing in all around them.