Spirits tax set could breach R100 per bottle threshold

Government excise tax on spirits is poised to exceed the R100 per 750ml bottle level if Finance Minister Enoch Godongwana applies the customary above-inflation increase in duties during next week’s Budget Speech. In the May 2025 Budget, National Treasury raised excise duties on alcoholic beverages by 6.75%, continuing a pattern of annual increases that have steadily lifted the tax burden on drinkers. The adjustment, which took effect from April 1, added to the cost of beer, wine and spirits, while traditional African beer was left unchanged.

For spirits producers, the trajectory of increases has become a focal point ahead of the 2026 Budget. 750ml remains the dominant unit size across all major spirits subcategories, including brandy, gin, vodka, whisky and rum. “At R100 per bottle, government tax becomes the biggest component of the cost to the consumer, ranging between 55% to 65% of the retail selling price of mainstream spirits products.

We believe there is no room for consumers to absorb further increases in the statutory component of the price,” said Sibani Mngadi. Mngadi is the corporate relations director at Diageo South Africa. Excise duties on spirits have nearly doubled over the past decade.

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Industry data shows the tax burden rising from roughly R52 per bottle in 2016 to a projected level above R100 should another increase be implemented. The companywarned that sustained tax hikesare contributing to the expansion of the illicit alcohol trade. Tax on 750ml bottles of booze could go over R100 a bottle.

Tax-evading traders exploit price gaps created by excise increases, offering smuggled and counterfeit spirits at less than half the price of legitimate products. Illicit trade now accounts for an estimated 18% of the total alcohol market, with spirits the most heavily targeted category. Illicit trade in spirits resultsin an estimated R11 billion loss in tax revenue annually, according to a 2025 Euromonitor study cited by the industry.

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