The South African brandy industry has welcomed Government's decision to introduce a differential excise tariff for potstill and vintage brandy. To be phased in over two years, the excise rate will be lowered by a 10% differential to the spirits excise tariff.
Christelle Reade-Jahn, director of the SA Brandy Foundation, the organisation representing the country's brandy producers, said the change was definitely a step in the right direction. "It will help to premiumise the category and also provide the impetus for building brandy exports."
The government's decision follows input from the brandy industry during the recent South African alcohol tax policy review process that was opened to public participation.
South Africa is the world's seventh largest producer of brandy by volume and its focus has been primarily on the domestic market. However, demand has been steadily contracting in recent years. Since 2006, when the brandy tax rebate was withdrawn, annual consumption has dropped by 18.5 million litres, to reach 30.2 million litres for the 12 months to June 2015.
Ironically, as sales have been sliding, the country's international reputation for brandy excellence has been steadily rising. Over the past 25 years, at the International Wine & Spirit Competition alone, South Africa has claimed the Best Worldwide Brandy title no fewer than 15 times.
