SA Canegrowers disputes research findings on impact of sugar tax on job losses

Sugarcane fields in the Umhlali area, North Coast, KwaZulu- Natal. KAREN SANDISON Independent Newspapers.

Sugarcane fields in the Umhlali area, North Coast, KwaZulu- Natal. KAREN SANDISON Independent Newspapers.

Published Jun 14, 2024


SA Canegrowers has slammed a recent study that contradicts its assertion that the Health Promotion Levy (HPL, or sugar tax) has resulted in 16 000 job losses in the sugar and beverage industries, with a further loss of 10% of direct jobs expected by 2031.

This comes after a study by the SA Medical Research Council (SAMRC)/Wits Centre for Health Economics and Decision Science (PRICELESS SA) found the introduction of the sugar tax “has not been associated with job losses in the sugar-related industries in South Africa”.

SA Canegrowers chairman Higgins Mdluli on Wednesday said the PRICELESS SA research on the impact of the sugar tax may be conflicted as the organisation admitted in their own publications and website that they “advocated for the Health Promotion Levy before it was implemented by the government in April 2018”.

Mdluli said the research’s “incorrect and disingenuous conclusion” was drawn by using the Quarterly Labour Force Survey dataset averaging employment in the full agricultural sector of South Africa.

“The data set includes employment across all industries in agriculture in South Africa, including major employers such as the grain, citrus and livestock sectors,” Mdluli said.

“The sugar tax has had little to no impact on the viability of most sectors in South African agriculture, but has a very real and direct impact on the demand for sugarcane. To suggest otherwise is in bad faith.”

Mdluli also said there was both independent and industry data that revealed the sugar tax led to job losses of sugarcane farmers.

“An independent study by National Economic Development and Labour Council (Nedlac), released in 2020, put the job losses in the sugar and beverage industries at 16 000,” he said.

“The Nedlac study compared employment figures in the industry between 2017 and 2019, and found that more than 9 700 jobs were lost by commercial and small-scale canegrowers after the sugar tax was introduced in 2018.

“These job losses due to the impact of the sugar tax happened before the Covid-19 pandemic and the associated disruption of the economy after 2020, in contrast to the conclusion by the SAMRC/Wits study.”

Meanwhile, PRICELESS SA managing director, Professor Susan Goldstein, said the discussion needed contextualisation.

“In 2002, 56% of South African women and 29% of men were either overweight or obese. In contrast, by the end of 2016, these rates had risen to 68% of women and 31% of men,” Goldstein.

“Obesity is a major risk factor for cardiac disease, cancer, diabetes and was estimated to cost South Africa R33.194 million in 2020.”

Goldstein said the World Health Organization has endorsed using fiscal policies for health, specifically a sugary beverage tax, as one of several policies to improve healthy diets.

She further said the SA Sugar Masterplan introduced several years ago has not shown any evidence to substantiate how or if the industry was innovating and/or diversifying.

“Before making specious allegations about how the tax is impacting employment, they should be honest about the fact that local demand for sugar has increased by 300 000 tons in 2022/2023,” Goldstein said.

She said that PRICELESS SA, as public health researchers, believed that the sugar tax would assist in improving the health of South Africans.

“Furthermore, we do not in any way gain from the HPL, from its implementation nor from the size of the tax. Therefore, to say that PRICELESS SA has a conflict of interest is unfounded,” Goldstein said.