How alcohol excise tax can reduce harm

> South Africa's alcohol taxation system requires urgent strengthening to address the devastating public health burden of harmful alcohol consumption. While National Treasury's proposed tiered excise structure represents progress, its thresholds are misaligned with current market realities and unlikely to reduce consumption. To effectively reduce alcohol-related harm, REEP proposes narrower tax tiers, higher uplift factors, and predictable above-inflation tax increases. Introduction On 13 November 2024, the National Treasury published its decadal discussion paper titled  The Taxation of Alcoholic Beverages [1]. On 6 November 2025, Treasury hosted the first of a series of online stakeholder workshops.  Currently, beer and spirits are taxed per litre of absolute alcohol (AA), while wine is taxed per litre of beverage, regardless of alcohol content. While keeping beer taxed per litre of AA and wine taxed per litre of beverage, Treasury’s main proposal is to introduce tiers so that beer and wine with higher alcohol content are taxed at higher rates. By introducing tiered excise taxes based on AA, Treasury aims to encourage consumers to substitute towards lower- or zero-alcohol alternatives (demand-side effect) and to incentivise the industry to reformulate beverages to contain less alcohol (supply-side effect) [2]. There is no proposal to change the excise tax on spirits, which are currently taxed at double the rate applied to beer. While we agree with the principle that higher-alcohol-content beverages should be taxed at a higher rate, the Research Unit on the Economics of Excisable Products ( REEP ) proposes an alternate placement of the tiers. We focus primarily on the beer proposal and briefly assess Treasury’s remaining recommendations. Why excise taxes matter Alcohol is a major public health problem in South Africa, contributing to violence, injuries and trauma presentations, mental disorders, infectious diseases, non-communicabl