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South African Breweries (SAB) says pressure on household budgets is weighing on demand for its affordable beer brands, even as premium products and alcohol-free beverages continue to support revenue growth.The comments come after parent company AB InBev last week reported a decline in beer volumes in South Africa during the second quarter to end-June while revenue increased by about 6%.“South Africa continues to operate in a constrained environment, with many households facing pressure from the rising cost of living and making increasingly considered purchasing decisions,” SAB said.“While we recorded a low single-digit volume decline, we have seen particular pressure in the affordable segments, with affordability challenges contributing to the growth of illicit alcohol.”Revenue was supported by disciplined management, continued investment in its megabrands, premium portfolio and innovation, despite lower volumes in the local market, SAB said.The pressure on household budgets is borne out by official data. Figures from Stats SA show annual consumer inflation jumped to 5.0% in June from 4.5% in May, the highest print since June 2024, with transport the largest contributor, driven mainly by higher fuel prices. The squeeze on transport costs, layered on already-elevated food and housing inflation, leaves less discretionary income for categories such as alcohol. Numbeo’s cost-of-living data, updated in July 2026, illustrates the scale of the gap. Numbeo is the world’s largest crowdsourced database for data on the cost of living and quality of life. South Africa continues to operate in a constrained environment, with many households facing pressure from the rising cost of living and making increasingly considered purchasing decisions.— SABAccording to the data, the average monthly net salary is estimated at R24,915, while the estimated monthly cost of living for a family of four, excluding rent, is R39,726, outstripping average take-home pay even before housing costs are even factored in. For a single person, monthly costs excluding rent are estimated at R11,127. Against that backdrop, even modest discretionary spending, including a domestic beer at about R24.59 for a 500ml bottle from a shop or R40 for a draft beer at a bar, competes with rising costs for basics such as bread, milk and electricity.According to global market intelligence provider Euromonitor, one in five alcoholic beverages consumed in South Africa is illicit, which SAB said has been fuelled by affordability challenges in the market.Previously, the brewer told Business Day that the R25bn illicit alcohol market is growing as the price gap between legal and illegal traders widens. SAB said illicit traders are at an advantage as they do not pay excise duty or value-added taxes, making their offering more affordable than products sold through the formal market. According to SAB, the global growth AB InBev is experiencing in the non-alcohol and Beyond Beer categories is also being reflected in South Africa.The company said consumers are looking for moderation, balance and a wider choice of beverages, with products such as Corona Cero, Brutal Fruit 0% and Castle Free contributing to the growth of its non-alcohol portfolio.“Our non-alcohol portfolio remains an important growth driver, with products such as Corona Cero, Brutal Fruit 0% and Castle Free contributing to the category’s strong performance. We see this as part of a broader shift in consumer behaviour, where innovation and expanded beverage choices are supporting more responsible drinking and occasion-based consumption,” it said.SAB said its strategy remains focused on investing in innovation, expanding consumer choice across different price points and growing its beverage portfolio.
