The conclusion of the Fifa World Cup also ended, even if only temporarily, the steady stream of alcohol advertising that tends to accompany big sporting events. It also came just days after the National Treasury reportedly met the industry to discuss the excise duty on alcohol and how it should be applied across various alcohol products. Alcohol’s place in South African society extends far beyond sport. It is woven into braais, weddings and family gatherings and, for some, into coping, escapism and social belonging in a society shaped by inequality and economic insecurity. Behind these occasions lies a different reality: harmful alcohol consumption contributes to road accidents, interpersonal violence, domestic abuse and growing pressure on already strained public services. (Karen Moolman) Even South Africans who never drink bear these costs through healthcare spending, insurance premiums and wider economic effects, with poorer households often carrying the heaviest burden. This is South Africa’s alcohol paradox: the sector supports jobs, tourism and economic activity, yet many costs of harmful drinking are shared across society. The Treasury therefore faces a difficult balancing act: reducing alcohol-related harm without undermining an important industry. This is the rationale for alcohol excise duties: taxes designed to recover part of alcohol’s social costs while discouraging excessive consumption of ethanol, the psychoactive and toxic component of alcoholic beverages that causes intoxication and many alcohol-related health and social harms. The Treasury’s 2024 discussion paper on alcohol excise policy acknowledged that South Africa’s present framework, based on weighted average retail price targets of 11% for wine, 23% for malt beer and 36% for spirits, may no longer be fit for purpose. Proposed reforms include stronger links between taxation and alcohol content, greater certainty in excise adjustments, and a minimum unit price aimed at reducing access to ultracheap alcohol. These are sensible reforms, particularly given South Africa’s reliance on excise taxation as its primary pricing instrument. The most effective approach is not choosing between excise tax reform and a minimum unit price but combining them as complementary tools that address different drivers of alcohol-related harm. Excise tax should primarily ensure products are taxed according to the amount of alcohol they contain, rather than broad beverage categories. The overall reforms should also tackle affordability by preventing alcohol from being sold at extremely low prices, particularly if cheap prices encourage high-volume harmful drinking. Together, these policies reinforce one another: excise tax addresses the amount of alcohol in products, while a higher minimum price addresses how cheaply harmful quantities can be purchased. Why does this distinction matter? South Africa’s drinking patterns provide the answer. Broad product categories are imperfect proxies for alcohol-related harm. Beer dominates consumption by volume, while wine and spirits account for a disproportionate share of alcohol (ethanol) consumption relative to their market share. Alcohol-related harm is not evenly distributed across the population. It is concentrated among a relatively small group of heavy episodic drinkers, meaning that the greatest harms arise from patterns of consumption rather than from any single beverage category. The consequences are often visible after long weekends, public holidays, special occasions and major sporting events, when refuse bags overflow with empty bottles and cans and trauma wards come under pressure. Because harm is concentrated among particular drinking patterns, broad price increases across all alcohol products are a blunt instrument. The main policy question is therefore not simply what is in the bottle but how much alcohol it contains, how cheaply it can be bought and how it is consumed. A premium bottle of wine consumed responsibly with meals cannot automatically be equated with high-volume binge drinking simply because both contain ethanol. Policy should therefore target the drivers of harm rather than rely primarily on beverage categories. Taxation alone cannot eliminate violence, domestic abuse or drink-driving. Safer communities require co-ordinated action across policing, criminal justice, transport and public health systems. Yet, taxation can contribute by changing incentives: encouraging reformulation towards lower-alcohol products and reducing access to the cheapest sources of high-volume ethanol consumption. The objective is not simply higher taxes, but a pricing framework that reduces harmful exposure while preserving legitimate economic activity. A broader shift in thinking is required. Policymakers should focus less on taxing beverage categories and more on targeting the drivers of harm through incentives that make profitability less dependent on selling ever greater volumes of ethanol, encourage investment in lower-risk products, and help consumers separate social drinking from intoxication. Building on the Treasury’s proposals, a smarter alcohol pricing framework should rest on four complementary pillars: excise reform that shapes incentives; pricing measures that address affordability; innovation that expands lower-risk alternatives; and enforcement that protects the integrity of the system. The first is reformulation, supported by progressive alcohol-by-volume tax bands. Researchers associated with the University of Cape Town have proposed thresholds at 2.5%, 3.5% and 4.5% alcohol-by-volume for manufactured beverages to encourage reductions in ethanol content rather than production volumes. Similar approaches could gradually be extended across categories if technically feasible. Evidence from the UK and Northern Europe suggests these incentives can reduce average ethanol exposure, even if some consumers partially compensate by drinking slightly larger quantities. South Africans have already seen similar dynamics after the Health Promotion Levy, where firms adjusted product composition rather than simply accepting lower sales. Regarding managing the affordability of harmful ethanol consumption, harm depends not only on alcohol strength but also on how cheaply large quantities of ethanol can be purchased. Policy should therefore focus less on product labels and more on discouraging the cheapest forms of high-volume drinking, regardless of category, by raising minimum prices. When it comes to substitution and innovation, low- and no-alcohol products should receive favourable tax treatment and supportive regulation across categories. The aim is not to replace alcohol-related harm with obesity or metabolic disease, but to encourage products that compete on alcohol content, calorie content and overall health profile. Greater certainty through multiyear excise pathways would also give firms confidence to invest in these alternatives. Regarding enforcement and illicit market control, excise reform cannot succeed if consumption simply shifts to untaxed and unregulated suppliers. Digital excise stamps, track-and-trace systems and stronger customs intelligence should therefore become as important as the tax reforms themselves. Together, these interventions seek to reduce ethanol exposure and alcohol-related harm without equivalent reductions in economic activity, an important consideration in a country facing persistently high unemployment and weak growth. The goal is not fewer jobs, fewer tourists or fewer customers for wine farms, restaurants and taverns, but fewer harms associated with the way alcohol is consumed. South Africa cannot tax its way out of harmful drinking, but nor can it ignore the role taxation plays in shaping incentives and consumption patterns. The question is therefore not whether South Africa should tax alcohol, but whether it can build an excise system that is smarter, more targeted and more effective. An endless cycle of higher excise rates risks lower compliance, expanding illicit markets and diminishing returns for public health and revenue collection. Smarter excise taxation works differently: it reshapes incentives, targets harm more precisely and uses pricing tools for the purposes they are best suited to achieving. • Ndlovu is associate professor: taxation at Wits University’s Margo Steele School of Accountancy.Business Day