South African sugar industry urges government to review health promotion levy amid economic, job loss concerns 

SOUTH AFRICA – South Africa’s sugar industry associations have appealed to Finance Minister Enoch Godongwana to uphold his commitment to initiate consultations with relevant parties regarding potential adjustments to the Health Promotion Levy (HPL). 

The HPL, implemented in 2018 to combat obesity and non-communicable diseases, has raised concerns among industry groups about its economic impact, especially on jobs and livelihoods in sugarcane-producing regions. 

An open letter, published on October 28 and co-signed by the South African Sugar Association, South African Sugar Millers’ Association, South African Farmers Development Association, South African Canegrowers, the Consumer Goods Council of South Africa, and the South African Sugar Converters Association, was also directed to Trade, Industry and Competition Minister Parks Tau and Agriculture Minister John Steenhuisen.  

The signees emphasized the industry’s significant role in supporting hundreds of thousands of jobs and its contribution to South Africa’s economy, expressing concerns that the HPL has already led to job losses. 

According to the letter, a study by the National Economic Development and Labour Council indicated that approximately 16,000 jobs were lost within the first year of the HPL’s implementation.  

Industry groups fear that further increases in the tax or an expansion to include fruit juices, as proposed, could exacerbate job losses, particularly in economically disadvantaged rural areas that depend on sugarcane farming. 

The letter also highlighted a lack of evidence showing that the tax had achieved meaningful health outcomes, such as reducing obesity or diabetes rates. Instead, the associations argued, the tax has contributed to economic instability and threatens livelihoods.  

The Bureau for Food and Agricultural Policy has forecasted that the HPL, if unchanged, could lead to a 10 percent decrease in sugarcane cultivation by 2030, potentially driving many small-scale growers into poverty. 

Industry representatives expressed their commitment to the Sugarcane Industry Value Chain Master Plan to 2030, a strategic initiative aimed at creating a sustainable sugar sector, promoting inclusive growth for small-scale farmers, and encouraging diversification within the industry.  

As part of this master plan, the government promised to commission two studies: one to measure the South African population’s total dietary intake to understand obesity causes comprehensively and another to assess the HPL’s socioeconomic impact. 

However, the industry claims these studies have yet to be completed.  

The letter called for Godongwana to either abolish the HPL or, at a minimum, impose a moratorium on any changes to the levy until the promised consultations are conducted. 

The associations urged the government to engage with industry stakeholders to address their concerns, underscoring the need for policies that support economic stability and food security. 

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