Schweppes Holdings Africa says prices of its sugary drinks will likely stay high despite a lower sugar tax. The company cites rising costs of fruit and sugar.
In the 2025 National Budget, the sugar tax on cordials was cut in half, from US$0.001 to US$0.0005 per gram, starting on January 1.
The tax has hurt demand for Schweppes drinks. Volumes fell 27% in the third quarter ending December 31, 2024, and 17% over nine months. Delta Corporation, a major Schweppes shareholder, reported this.
"The lower sugar tax is good news," said Delta Secretary Ms. Faith Musinga. "But high costs of fruit and sugar make it hard to lower prices."
Delta also raised prices by 10% to 33%. This slowed demand for various products.
The sugar tax made local drinks more costly. This led to more imports of cheaper options.
Schweppes saw a jump in informal imports of Mazoe Orange Crush. Most came from Zambia.
The government introduced the sugar tax last year. It applies to both ready-to-drink and concentrated beverages.
The tax started at US$0.02 per gram. It was later cut to US$0.001 after industry complaints.
Delta paid US$31.2 million in sugar tax from February to December 2024, covering both sparkling and cordial drinks.
The tax aims to discourage sugary drink consumption. High sugar intake is linked to obesity, diabetes, and heart disease.
The government wants to reduce these health risks. It hopes to promote healthier diets.
Money from the sugar tax goes to healthcare. It funds cancer treatment and equipment.
In the 2025 National Budget, the sugar tax on cordials was cut in half, from US$0.001 to US$0.0005 per gram, starting on January 1.
The tax has hurt demand for Schweppes drinks. Volumes fell 27% in the third quarter ending December 31, 2024, and 17% over nine months. Delta Corporation, a major Schweppes shareholder, reported this.
"The lower sugar tax is good news," said Delta Secretary Ms. Faith Musinga. "But high costs of fruit and sugar make it hard to lower prices."
Delta also raised prices by 10% to 33%. This slowed demand for various products.
The sugar tax made local drinks more costly. This led to more imports of cheaper options.
Schweppes saw a jump in informal imports of Mazoe Orange Crush. Most came from Zambia.
The government introduced the sugar tax last year. It applies to both ready-to-drink and concentrated beverages.
The tax started at US$0.02 per gram. It was later cut to US$0.001 after industry complaints.
Delta paid US$31.2 million in sugar tax from February to December 2024, covering both sparkling and cordial drinks.
The tax aims to discourage sugary drink consumption. High sugar intake is linked to obesity, diabetes, and heart disease.
The government wants to reduce these health risks. It hopes to promote healthier diets.
Money from the sugar tax goes to healthcare. It funds cancer treatment and equipment.
