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Sugar tax to cost SA 60 000 jobs, warns Coca-Cola

Aug 16 2016 17:56

Cape Town - The proposed sugar tax could result in South Africa losing 60 000 jobs in the beverage industry, said Coca-Cola Beverages Africa chairperson Phil Gutsche.

Gutsche was speaking at a press conference on Tuesday where he called on the Nelson Mandela Bay Municipality and the Eastern Cape Government to support the beverage industry in opposing the proposed tax on sugar-sweetened beverages (SSBs).

He was supported in this call by Steven Dondolo, Coca-Cola Beverages South Africa shareholder, the Beverage Association of South Africa (BevSA), Little Green Beverages of Buffalo City and Twizza Softdrinks from Queenstown.

“Our industry supports the livelihoods of 14 000 people in this city and many more in the province. Nationally we support more than 200 000 jobs."

Finance Minister Pravin Gordhan in his February 2016 Budget announced a proposal to introduce a tax on SSBs with effect from April 1 2017 to help reduce excessive sugar intake in one of Africa’s most obese nations.

The tax policy forms part of the Department of Health’s strategic plan for the prevention and control of non-communicable diseases.

"If this tax proceeds, we stand to lose 60 000 jobs in our industry. More than 5 000 livelihoods will be affected in Nelson Mandela Bay alone”, warned Gutsche.

“The poor will therefor literally become poorer and not thinner as a result of this proposed tax”, he said.

BevSA executive director Mapule Ncanywa, emphasised that 97% of South Africa’s obesity problems had nothing to do with sugar-sweetened beverages, claiming they accounted for only 3% of daily kilojoule intake.

“There are better ways to achieve the government’s goals”, she said.

Randall Dayce, plant manager at Coca-Cola Beverages South Africa in Nelson Mandela Bay indicated that already, taxes on average accounted 25% of the purchase price of soft drinks.

He and smaller bottlers Twizza and Little Green Beverages also reported that the tax would have significant implications for employment and growth prospects in the communities where they operated and in the province.

On behalf of its Refreshhh brand Little Green Beverages director Glenn Sheppard stated that they would have to reconsider a significant investment in the extension of their Buffalo City plant, which would have added an additional 70 direct jobs.

Twizza financial director Nico de Jager said that even in a small town like Queenstown, the proposed tax could wreak havoc, claiming that it would leave up to 815 people dependent on the state for their income and sustenance.

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