When it is said South Africa has a big drinking problem, it is not about the number of people who drink, but the volume of alcohol that is consumed by those who do. (Photo: Brent Hofacker / Wikipedia) 
Late last year, National Treasury proposed the introduction of minimum unit pricing to reduce heavy drinking.
There has since been a steady infusion of articles by the liquor industry claiming a sharp increase in the production and sale of illicit alcohol over the past decade, and suggesting an even more chilling effect on tax revenues if minimum unit pricing were to be implemented.
Clearly, this narrative is meant to push the buttons of a government struggling to balance its books. Things came to a head on 8 August 2025 when Business Day led with claims by South African Breweries (SAB) CEO Richard Rivett-Carnac that minimum unit pricing will “punish the poor and turbocharge the illicit market, harming both the industry and public safety”.
These claims need to be dissected, both for their truthfulness and their logic. But before we do that, it is important to explain how minimum unit pricing works and what it is intended to do.
Floor price
Minimum unit pricing is not a tax, but a floor price for a unit of pure alcohol, below which the beverage containing it may not be sold. So, for instance, if the minimum unit pricing is R12 per unit, then a 330ml bottle of beer, which contains one unit (15ml) of pure alcohol (ethanol), could not be sold below that price.
Thus, the introduction of minimum unit pricing would have no effect on the price of a 330ml bottle of Castle Lager, which at 5% alcohol by volume contains 1.1 units of ethanol and currently sells in a major retail store for R16.
On the other hand, a minimum unit pricing of R12 would have a significant effect on the price of a one-litre bottle, which contains 3.3 units of ethanol and sells for just R22, or R6.67 per unit of pure alcohol. If the minimum unit price were R12, its selling price would have to go up by 80%.
No wonder the CEO of its manufacturing company is worried. Of course, the question must be asked why alcohol in one-litre containers is sold so cheaply in the first place. It can’t be that the cost of production of each unit of alcohol in the smaller container is more than twice that of the larger one.
This price differential suggests deliberate tactics that encourage heavy drinking.
In fact, a study from Tshwane published in 2018 found that drinkers who consumed alcohol from containers designed to hold more than one unit of ethanol – a standard drink – were nearly eight times more likely to drink heavily. No doubt the causality works both ways: those who need to drink heavily will buy cheaper liquor, and cheaper liquor feeds their craving to drink more.
Injury, disease and death
The fact is that the legal liquor industry is a major contributor to injury, disease and death in South Africa. Blood alcohol levels are not routinely taken from the perpetrators and victims of violence, but the many studies conducted over the past decade point to alcohol as a factor in 60% of femicides, half of all homicides, two-fifths of rapes and a quarter of traffic fatalities due to driver error.
If the assertions of a study commissioned by the Drinks Federation of South Africa into illicit alcohol are true – that illegal trade constitutes about a fifth of the total market – that still implies that legally produced alcohol contributes up to four-fifths of the total alcohol harm in South Africa.
And unlike the industry’s suggestion, the major damage is not the occasional death from ill-derived concoctions, but widespread harm from heavy drinking of all liquor products, irrespective of whether it is legally produced or not.
Heavy consumption
When we say South Africa has a big drinking problem, we are not talking about the number of people who drink, but the volume of alcohol that is consumed by those who do.
Only one-third of adults say they drink, but the average drinker consumes five standard drinks a day – that’s 2½ times more than what could be regarded as the upper limit of “responsible drinking”. The liquor industry benefits from heavy drinking – the very same companies that appeal to public health and safety as reasons not to introduce minimum unit pricing.
Their claims must be taken with a fistful of salt. Much of the excessive supply of liquor finds its way into poorer communities, where the death rate from alcohol is 4½ times higher than in wealthier ones. Here, the call to “drink responsibly” rings hollow as many drink heavily to escape the hardships of a daily life devoid of recreational alternatives.
The industry compounds their misery by flooding their communities with large quantities of liquor at low prices. It is this behaviour that punishes the poor, not the proposed introduction of minimum unit pricing.
Where minimum unit pricing has been introduced in other countries such as Scotland and Wales, Australia and Russia, it has reduced the prevalence of heavy drinking, with positive health benefits for all, including poorer consumers.
A systematic review published in 2023 found that immediate reductions in acute alcohol-related hospital admissions ranged between 2% and 9%. Unsurprisingly, admissions for chronic alcohol-related conditions such as liver cirrhosis lagged by two to three years, but then reduced by 4%-9% annually.
Illicit sales
There may well be some growth of the illicit market, which could affect tax revenues. However, it is clear from the abovementioned review that the illegal market in countries implementing minimum unit pricing did not grow as much as industry had predicted, certainly not enough to undermine its substantial health benefits and consequent savings in healthcare costs.
In South Africa, the claim by the liquor industry that illicit sales have increased by 53% since 2017 must be fully interrogated, given that legal beer and wine sales have both increased markedly over the past decade. That report must be made publicly available if it’s to be taken seriously.
As it stands, there is no objective evidence of substantial erosion of the legal market that would have been expected if illicit sales had expanded sharply – especially as South African consumers have been under pressure for a long time.
Nonetheless, the growth of the illicit trade is a real risk that must be dealt with in the same way that illegal cigarettes should be – with effective enforcement of a track-and-trace system from the point of production to the point of sale. There is nothing to stop industry taking the lead in this regard, unless, of course, it is hesitant to divulge where its own products end up.
Tax revenue
Any excise tax losses will also be offset by the increase in VAT revenues. Modelling by UCT academics Corné van Walbeek and Naomi Gibbs shows that, taking all factors into account, government revenues will increase if minimum unit pricing is set at about R12 per unit (at 2025 prices).
Consumption among moderate drinkers – who tend to buy higher-priced products – will be largely unchanged, while consumption among heavy drinkers will decrease. That is exactly what minimum unit pricing is intended to achieve – a reduced burden on society and net savings to the fiscus.
Government must not be deterred by claims that minimum unit pricing will reduce tax revenue. The role of extra taxation of the liquor and tobacco industries is to make them pay for the damages they cause to society.
If the liquor industry caused less harm to our society in the first place, Treasury would need less money to pay for its damages.
SAB’s Rivett-Carnac would have us believe that the status quo represents an optimal balance between the liquor industry’s societal harm and economic benefit – in a country with twice the average global consumption per drinker, 10 times the worldwide prevalence of foetal alcohol spectrum disorder, eight times the global homicide rate, 1.3 times the traffic fatality rate and 1.1 times the incidence of intimate partner violence compared with the global average.
The experience of other countries that have implemented minimum unit pricing and other strategies to reduce heavy drinking proves that we should not swallow that fallacy. DM
Dr David Harrison is the CEO of the DG Murray Trust (DGMT).