BusinessLive reports that wine producers say the hike in excise duties on wine and brandy is a major blow for the sector as it continues to struggle to make significant profits.  

In his budget speech last week, Finance Minister Malusi Gigaba announced an excise tax increase of 8.5% for wine (including sparkling wine) and brandy, and 6% on fortified wine.  "The above-inflation excise tax is extremely disappointing, especially given the fact that the industry reached, and even exceeded, the tax incidence targets agreed upon in 2014," said Rico Basson, MD of wine producers body Vinpro.  He said SA grape producers had been under financial pressure for some time due to the prevailing drought and other economic challenges.  Production costs have doubled in the past decade and costs were expected to rise 9% in 2018, along with a 17% increase in the minimum wage, which takes effect on 1 May.  "With the wine industry supporting approximately 290,000 jobs, the fact that the average wine grape producer does not function at sustainable profit margins and more than a third operate at a loss, is great cause for concern.  The considerably lower 2018 wine harvest projection as a result of the drought not only has significant economic impact, but also leads to social welfare challenges due to job losses," Basson said.

• Read this report by Bekezela Phakathi in full at BusinessLive

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