MEDIA STATEMENT BY SA CANEGROWERS
7 October 2026
SA Canegrowers calls on the Minister of Finance Enoch Godongwana to use the opportunity provided by the upcoming Medium Term Budget Policy Statement to scrap the Health Promotion Levy (HPL), commonly called the sugar tax. If not, he risks placing the future viability of the entire sugar value chain at risk.
Since its introduction in April 2018, the sugar tax has caused severe damage to the sugar industry. It has led to multi-billion-rand revenue losses and substantial job losses, in a country with one of the highest unemployment rates in the world, and contributed to the permanent closure of two mills in KwaZulu-Natal. The NEDLAC-commissioned study on the HPL’s socio-economic impact found that by 2019 the industry, covering both sugarcane farming and milling, had lost 16,000 jobs. In the levy’s first year alone, the industry lost 250 000 tons of sugar sales.
The sugar industry is facing an unprecedented confluence of crises, that have left growers and the million livelihoods who depend on them on the brink of financial disaster. At present, due to various reasons, the current harvesting season has seen an 18% drop in sugarcane delivered to mills compared with the previous season. It has also seen a 17% drop in the recoverable value extracted from that cane as it is processed. It is expected that the milling season may be extended for longer than usual this year, but should there not be a recovery in volumes of sugarcane crushed, smaller harvests will lead to losses for growers. This will further compound the impact of over two years of foreign sugar flowing into the country due to weak tariff structures and enforcement, and the ongoing business rescue process at Tongaat Hulett. Through all of this, the sugar tax has continued to turn beverage manufacturers away from locally produced sugar.
South Africa’s sugar industry supports over a million livelihoods. They include more than 27,000 small-scale growers, farmworkers and cane cutters, mill employees and engineers, and small and large businesses that support the production, transport, and sale of sugar. The income from the sugar industry supports the shops and retail stores in rural towns in Mpumalanga and KwaZulu-Natal. Every one of those livelihoods is now under threat.
“Our small- and large-scale growers are being hit from every side. Less cane is reaching the mills, and local sugar processed at the mills are being displaced from retail shelves by foreign sugar. Growers and millers have committed through the Sugarcane Value Chain Master Plan to create a future for the industry, but we need the same commitment from government policies. The sugar tax is a burden on the sugar industry the government can lift immediately,” said SA Canegrowers chairman Higgins Mdluli.
The Master Plan is a social compact between government and industry and is the process through which all stakeholders work together on the threats and opportunities facing the sector. Its success depends on policy alignment across government, and the sugar tax works directly against it.
“As long as the levy remains on the books, growers, millers and investors cannot plan adequately for the future. Diversification needs long-term capital, and long-term capital needs policy certainty. The only way to provide that certainty is to scrap the sugar tax,” said Mdluli. “We therefore urge President Cyril Ramaphosa and his administration to scrap the sugar tax entirely. Doing so would give the industry the opportunity to focus on forward-looking initiatives, and the role that the sugar industry can play in green industrialisation.”
Despite its name, revenue raised through the Health Promotion Levy is not ring-fenced for health promotion or public-health initiatives. Instead, it flows into the National Revenue Fund alongside other tax revenue. This raises further questions about maintaining a levy that continues to impose significant costs on a strategic agricultural industry while its proceeds are not directly dedicated to the health objectives used to justify it.
ENDS
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Gerhard Mulder
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Victoria Tompkins
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