South Africa: Government eyes sugar sector exemption to boost local supply
Proposed policy shift to aid local industry
If enacted, the exemption would permit forms of cooperation normally prohibited under the Competition Act, including joint planning and pricing negotiations. The goal, according to the DTIC, is to reduce import reliance, protect rural jobs, and support the long-term sustainability of the industry.
The proposal is part of the broader Sugarcane Value Chain Master Plan 2030 — a government-led framework that includes commitments from both public and private sector stakeholders to stabilise and transform the sugar sector.
Industry body welcomes move
Industry group SA Canegrowers has backed the proposal, saying it would create space for 'inclusive decision-making and sector stability' while enabling discussions that lead to fairer pricing for consumers. The organisation represents over 24,000 small-scale and 1,200 commercial growers, mainly in KwaZulu-Natal and Mpumalanga.
In a statement, SA Canegrowers said commercial users such as food and beverage producers are critical to the local sugar value chain. Ensuring a commitment from these buyers to prioritise local sugar would help secure thousands of jobs in farming communities.
Ongoing threats to sector viability
The sugar industry has faced sustained pressure from cheap sugar imports and the Health Promotion Levy (commonly referred to as the sugar tax). These factors have added to concerns over long-term viability, particularly for smaller producers.
As part of the Master Plan process, stakeholders have also explored diversification opportunities into areas such as biofuels and sustainable aviation fuels. According to SA Canegrowers, the draft exemption would allow for necessary coordination among producers and investors to advance these projects without violating competition laws.
Next steps
The draft regulations were issued earlier this month by Trade and Industry Minister Parks Tau. No implementation date has been confirmed, and the proposal is currently open for public comment.
If approved, the exemption would mark a significant shift in how collaboration is handled in the agricultural value chain, potentially setting a precedent for other sectors under pressure.
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