Thursday, April 23, 2015


South Africa, Cape Town, February 2015:

THE South  African brandy  industry has  welcomed the indication  from  Government that  excise  duty  increases  are under review, saying it revealed a greater understanding of the industry and its challenges. An excise hike of 8.5% on brandy was announced by the Minister of Finance, Nhlanhla Nene,  during  the  annual  National Budget  Speech  on  25 February 2015.

Mr Nene added that other reforms under consideration include providing excise
duty relief to wine-based spirits (e.g. brandy). The rationale is that brandy is at a cost disadvantage compared with other forms of alcoholic spirits, because it takes 4-5 litres of wine to produce a litre of brandy.
The above is the result  of  continuous  open  dialogue between the  brandy
industry and  various Government  departments  around the  unique  challenges facing  wine  producers  and  cellars,”  says  Christelle Reade-Jahn  of  the  South African Brandy Foundation.

The South African brandy industry has long played a major role in the economy.
It is estimated that South Africa is the world’s seventh largest brandy producer.

While the majority of brandy is consumed within the local market, this industry
has  also  achieved  significant  export  growth  although  from  a  relatively  small

This product of the vine has significant economic relevance.
It  takes  about  five  litres  of  wine  to  produce  one  litre  of  brandy,”  explains
Reade-Jahn.  “As  such,  the  South  African  brandy  industry  has  a  symbiotic
relationship  with  the  wine  industry,  increasing  local  manufacturing  value  and stimulating local job creation.”

The market demand for brandy also has a significant impact on the primary wine
producers in South Africa. Recent research by the Bureau of Economic Research
(BER) indicated that for every one percent of increase in South African brandy
sales volumes,  the  price  of  distilling  wine  to  South  Africa’s  grape  producers
increases by 0.9%.

A growth recovery of the SA brandy industry will therefore positively influence
the overall profitability of South African wine producers, who are significant local

The economic value added multiplier for South African brandy has been  estimated  at  1.30,  the  government  tax  multiplier at  1.44  and  the employment multiplier at 6.85. This shows that for every R1-million increase in the demand for brandy, economic value added in the economy will increase by
R1.3-million, government  tax  revenue  from  excise  and  VAT  will  increase  by
R1.44 million and 6.85 jobs will be gained. The economic growth potential from
a world class local product such as South Africa’s brandies is substantial.”

Reade-Jahn  also  added  that  the  cost  of  producing  a  brandy  to  South  Africa’s high standards was far higher than that of spirits produced from grains or sugar cane. “Grapes are a more expensive raw material compared to maize or sugar cane. South Africa’s legal requirements for the production of brandy are superior to most other brandy-producing countries.

This gives the industry the ability to produce brandies of world class quality.”

For more information about the SA Brandy Foundation
visit or contact Danie Pretorius, General Manager: SA Brandy Foundation via e-mail
For press assistance contact Monique Roux of Manley
Communications on 0861 MANLEY (626 539), email  or  visit  the  Press  Room of

Manley Communications at