Consumer Goods Council of South Africa (CGCSA) Welcomes the National Budget Saying It Has Some Poisitive Measures Which Will Benefit the Fast Moving Consumer Goods Sector

The Consumer Goods Council of South Africa (CGCSA) has welcomed the National Budget presented on 22 February by the Minister of Finance, Mr. Enoch Gondongwana which had some positive announcements which will benefit the consumer goods sector in particular and the economy in general. The announcements also showed that the government was beginning to listen and consider practical and solutions-based proposals from the CGCSA to support economic recovery and growth.

In particular, following engagement and lobbying by the CGCSA and other industry key stakeholders, the minister announced that the health promotion levy will remain unchanged for the next two years to enable the sugar industry to diversify or restructure. The CGCSA considers this to be a monumental achievement, given that discussions are currently underway with government and other stakeholders tasked with the responsibility of determining the health benefits of the HPL, including the commissioning by the Presidency, of the socio-economic impact study. The two-year period we believe, will also give the industry the opportunity to look at whether the levy is the most effective way to address concerns about obesity, non-communicable diseases and/or other health concerns. The CGCSA is a promoter and facilitator of creating communities dedicated to healthy lifestyle choices, through Healthy Food Option Program and Food Loss and Waste.

Given the work of the CGCSA on food security and safety issues, we welcome the extension on the refund on the Road Accident Fund levy for diesel used in the manufacturing process, such as for generators, to manufacturers of foodstuffs. The CGCSA would have wanted the rebate to be also extended to the retail and pharmaceutical sector which is incurring additional diesel costs to run generators during load shedding. The retail and pharmaceutical sector, is at the community level and ensuring access to food and medicines at exorbitant cost due to power outbreaks. Furthermore, we are disappointed on the missed opportunity by the Minister to provide relief for whole food and medicine value chain through general fuel levy rebates. The association will engage with National Treasury to understand their rationale of not including the retailer and pharmaceutical sector.

Tax measures to encourage businesses and individuals to invest in renewable energy and increase electricity generation will encourage investment in additional energy supplies and ease the burden on the national grid.

CGCSA is concerned that the economy, which is already struggling to grow, cannot endure the intensity and frequency of load shedding which is disrupting business operations, increasing running costs through diesel usage and putting at risk the very businesses that the government expects to create employment and food security. In this regard, the decision by the government to take over a significant portion of Eskom’s debt is a move in the right direction towards resolving the structural, financial and operational challenges the power utility is facing. Longer-term solutions are however needed to improve and restore the security of energy supplies.

Regarding the success of SARS in combating illicit trade, in particular of tobacco, the CGCSA says these achievements reflected the impact of the multi-stakeholder approach which also involves the CGCSA’s Crime Risk Initiative to combat illicit trade. The CGCSA has and continues to share information received through its Hot Line with law enforcement agencies for further investigation and relevant action.

Concluding, the CGCSA will be hosting its inaugural CEO Symposium where government and CEOs of member companies of the CGCSA will discuss how to address issues of concern, and come up with meaningful and practical solutions-based framework to not only tackle the current challenges facing the economy but also ensure that the FMCG sector continues to make a meaningful and sustainable contribution to economic growth and job creation.

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