South Africa's sugar tax could include pure fruit juices

PUBLISHED: Tue, 18 Oct 2016 06:36:40 GMT

South Africa could add pure fruit juices to the list of drinks expected to face a levy under a proposed tax on sugary drinks, the Treasury has said, in a country where more than half of adults are overweight.

In his budget speech in February, Finance Minister Pravin Gordhan proposed the tax on sugary drinks to be implemented in April next year, aimed at fighting growing obesity in the continent’s most lucrative market for Coca-Cola.

Health campaigners have welcomed the tax, citing obesity in South Africa, where 42 percent of women and 13 percent of men categorised as obese.

The proposal initially exempted beverages containing natural or intrinsic sugars found in unsweetened milk and milk products and 100 percent pure fruit juices from the 20 percent tax, but officials have recently reconsidered their decision citing similar health risks to drinks with added sugar.

“Many health experts argued that 100 percent fruit juice should also be subject to the tax, as the natural sugar level it contains have the same or very similar negative health consequences as that of sugar added in soft drinks,” the National Treasury said in an emailed response to Reuters.

Chairman of South African Fruit Juice Association, Johan de Kock, said the big difference between fruit juices and some of the other beverages is that fruit juices contain a lot of nutritional value in vitamins and minerals.

“We believe the health benefits of 100 percent fruit juice outweighs the fruit sugar that it contains,” de Kock said, adding that his group had not been formally informed about the tax on pure fruit juice.

The Treasury said it will debate the proposed tax, including the inclusion of pure fruit juice, during a meeting in November.

The proposed tax on sugary drinks has been opposed by business lobby groups who argue that the tax will impact the economy by hurting soft drink producers and cutting jobs.

If the proposed law is passed, South Africa will join Mexico, France, Hungary in introducing taxes on sugary drinks to fight obesity. Britain also plans to launch the tax.

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.