The South African wine and spirits industry's worst fears have been realised with the implementation of excise duties of more than 30% on natural wine.

It has been a serious body blow to an industry already reeling from a strong Rand, a stagnant domestic market, unsold stocks still in tanks and the new harvest pouring in.

The government expects to raise about R660m in additional revenue from alcoholic beverages in the coming year.

There were hikes across the board on alcoholic beverages, with duties on ciders and FABs going up 7.1% from R14.36 to R15.37 a litre, spirits by 13.5% from R13.02 to R14.78 for a 750ml bottle and beer up by 9% from 47.7% to 52.24c for a 340ml can. Fortified wines went up 16% from R2.00 to R2.30 a litre, while sparkling wine went up 28% from R2.52 to R3.28 a litre.

Distell, South Africa's biggest wine and spirits company, said the impact of these hikes would be felt down the line all the way to primary producer level, and could impact on job growth.

Corporate Affairs Director, André Steyn, said the model the government was using to arrive at its benchmark for its tariff increases had serious flaws.

He said this type of hike also led to increased smuggling and counterfeiting.

Diageo's local subsidiary, Guinness UDV, was also concerned about a possible introduction of a differentiation in excise tariffs on domestic and imported alcoholic beverages. Financial director Chris Caldwell said the company hoped that this would not develop into a trend as it could have long-term investment implications.