Budget Speech 2022: A Surprise Turn on 2030 Sugar Value Chain Master Plan

We note with concern that the Minister of Treasury, Honourable Enoch Godongwana, announced in his national budget speech yesterday that the Health Promotion Levy (HPL) will increase to 2.31 cents per gram above 4 grams of sugar in sugar-sweetened beverages from 1 April 2022. This announcement which caught us by surprise contradicts our agreement with government contained in the Sugar Master Plan that was crafted and signed after a series of consultations and engagements with various social partners and other stakeholders in the sugar value chain.

In terms of the 2030 Sugar Value Chain Master Plan signed in November 2019, the HPL is to remain unchanged from its status quo as of 28 February 2020 for a duration of three years.

We acknowledge and greatly appreciate that government has honoured its commitment in 2020 and 2021. However, the same cannot be said about 2022, which is meant to be the third year of this moratorium. As an industry, we rested with comfort knowing that the interests of our members are protected in the remaining year as contained in the 2030 Sugar Value Chain Master Plan.

We have registered our displeasure and disappointment with the Sugar Master Plan Convenors’  platform at the Department of Trade, Industry and Competition (DTIC) and we hope to have an urgent meeting with the office of the Minister to address this disservice. 

Our industry is still recovering from the many challenges that were brought about by the novel Covid-19 pandemic and the July 2021 unrests and as such, the 2022 sugar tax increase does not inspire to help us gain confidence in recovery, but exacerbates our challenges even further, making it a hard journey of recovery to stabilise the socio-economic landscape in the environment we operate in.

We trust and hope that government will lend us an ear and revert back to agreements made in the 2030 Sugar Value Chain Master Plan. As an industry, we remain fully committed through our participation and contribution to the objectives of the Sugar Master Plan. 

Issued by: Beverage Association of South Africa

Contact: Mpho Thothela (Executive Director)

Cell: 083 540 6003

Email: mpho.thothela@bevsa.co.za