SOUTH AFRICA – The Drinks Federation of South Africa (DF-SA) has unveiled its latest economic research report, “The Contribution of the Alcohol Beverage Industry to the Economy of South Africa,” highlighting the critical role of the alcohol sector in the nation’s economic development.
According to the report, in 2022, the alcohol industry contributed R226.3 billion (US$13.19B), or 3.6 percent of South Africa’s GDP, showcasing its significance in the country’s financial landscape.
This contribution also generated R96.9 billion (US$5.7B) in tax revenue, representing 6.7 percent of South Africa’s total tax collection.
DF-SA emphasized that this amount could finance the salaries of 470,385 teachers or the construction of 131,621 affordable housing units, further illustrating the industry’s positive impact.
The alcohol beverage industry sustains 498,999 jobs, generates R215.5 billion (US$12.6B) in household income, and supports the livelihoods of 1.15 million South Africans.
The sector’s reach extends far beyond manufacturing, as it stimulates economic activity across various parts of the value chain, including producers, suppliers, distributors, wholesalers, retailers, and the hospitality sector.
In terms of consumer spending, the report noted that the liquor industry accounted for R160 billion in domestic sales in 2022, representing 18.2 percent of spending on food, beverages, and tobacco and 3.7 percent of total consumer expenditure.
Beer dominated South African liquor sales, accounting for 71 percent of total sales by volume, while ready-to-drink alcoholic beverages (RTDs) made up 15.6 percent, followed by wine at 10.1 percent, and spirits at 3.4 percent.
Additionally, South Africa’s liquor industry is a net exporter, primarily due to its extensive wine exports.
In 2022, total alcohol beverage exports reached R20.6 billion (US$1.2B), with wine exports constituting 55 percent of this total. Liquor imports, by contrast, stood at R9 billion (US$524.8M), underscoring the sector’s strong export performance.
Shamal Ramesar, Head of Research at DF-SA, emphasized the industry’s responsibility in shaping South Africa’s economic landscape.
“This report underscores the responsibility that our industry holds in shaping the economic landscape of South Africa. We are committed to being a proactive partner and contributing to a prosperous, just, and safer South Africa,” Ramesar stated, noting the industry’s role in promoting responsible drinking behaviours.
DF-SA concluded that the alcohol beverage industry is well-positioned to support government objectives in reducing unemployment and poverty, particularly among low-skilled workers, through inclusive economic growth and fiscal revenue generation.
The report urged for further collaboration between industry stakeholders and government to sustain and expand the industry’s positive economic impact.
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