- Government is mulling including a so-called 'sugar tax' on 100% fruit juice.
- At the moment only fruit juice with added sugar is included in the sugar tax.
- While industry bodies are surprised at this move, claiming it is not in line with government's Sugar Master Plan, health experts think it will be a good idea.
Government is considering applying the Health Promotion Levy - commonly known as the 'sugar tax' - to 100% fruit juice, National Treasury said on Tuesday.
The tax, which is currently applied to a range of soft drinks as well as fruit juice with added sugar, does not apply to 100% pure fruit juice.
Treasury said that pure fruit juice was also high in sugar, which could also have "impact" on health.
"However, the intention is to explore including [100% fruit juice] in the tax net. The policy rationale is that intrinsic natural sugar is in a form of a fruit and not juiced into a container where there is high concentration of sugar in a serving, resulting in the same impact as sugar sweetened beverages," National Treasury explained.
After three years of no changes, government decided to increase the levy on sugar sweetened beverages. In the recently tabled National Budget, it was stated that the Health Promotion Levy for beverages with more than 4g of sugar content per 100ml will be increased from 2.21c/g to 2.31c/g from 1 April 2022.
"Consultations will also be initiated to consider lowering the 4g threshold and extending the levy to fruit juices," according to the budget report.
Rudi Richards, general manager of the SA Fruit Juice Association (SAFJA), said the industry was "surprised" by government's announcement regarding 100% fruit juice.
"Part of the problem is that it seems what National Treasury is saying is not quite in sync with a master plan between the sugar industry and the Department of Trade and Industry and Competition (dtic). Our view is that this type of approach is not followed elsewhere in the world as far as we know and 100% fruit juice is not taxed in this way," said Richards.
But, said Richards, the association "presume[d] there would have to be discussions and consultations on the way".
The Consumer Goods Council of South Africa (CGCSA) has criticised the decision by the government to increase the sugar levy by 2.31 cents per gram, saying it would result in "unintended consequences of job losses" and further contribute to many sustainable farmers losing their livelihoods.
It also believes there was insufficient consultation on the issue.
"It was particularly worrying that the tax has been increased at a time when the government is implementing the Sugar Master Plan to grow the sector and protect it from imported competition," stated the CGCSA in reaction to the National Budget report.
The SA Canegrowers Association says it is deeply concerned about the impact of the Health Promotion Levy increase on the canegrowing sector.
"The further expansion of the HPL to other industries can only serve to extend its job killing impact on the South African economy. These decisions are particularly alarming given that there is no evidence that the HPL has been effective at reducing obesity levels in the country," the association commented.
"This is why SA Canegrowers has written to Finance Minister Enoch Godongwana to request a meeting to discuss the recent decision to increase this industry-crippling levy. Hopefully, Treasury can be prevailed upon to reverse this unfortunate decision."
On the other hand, Prof. Susan Goldstein, a public health specialist at the Wits Centre for Health Economics and Decision Science, thinks extending the sugar tax to 100% fruit juice is a good idea.
"People don't recognise how much sugar is in the 100% fruit juices. The harm far outweighs the good of the various vitamins," she explains.
Her view is supported by Prof. Karen Hofman, also of the same centre.
"[Taxing] it is essential: fruit juice often has more sugar than cold drinks. Just because it's natural doesn't mean it's healthy. We should be eating our fruit not drinking it," says Hofman.