Inflation Report: South Africans struggle under high price of meat, alcohol

The latest Consumer Price Index (CPI) report for August 2025 indicates that while South Africa’s headline annual consumer price inflation eased slightly to 3.3% from 3.5% in July, consumers continue to face significant price increases in essential categories, particularly meat, alongside rising costs for alcoholic beverages.

These figures, released by Statistics South Africa (Stats SA), highlight ongoing pressures on household budgets across the country.

Meat Prices Lead Food Inflation with Double-Digit Surge

Food and non-alcoholic beverages remain a substantial contributor to overall inflation, accounting for 0.9 percentage points of the 3.3% annual inflation rate. Within this category, meat stands out with a substantial annual inflation rate of 11.3% in August 2025. This double-digit increase means that meat is becoming increasingly expensive for South African households.

Analysis from the Competition Commission’s Cost-of-Living Report further elaborates on these dynamics. While Individually Quick Frozen (IQF) chicken saw its retail price increase marginally from R95.94 in December 2024 to R96.31 by May 2025, its retail margin has declined from approximately 50% in 2021 to under 40% recently. This suggests that retailers have absorbed some costs, but prices still edged up.

Eggs, a vital protein source, continue to show volatility. After being severely impacted by avian flu shortages in late 2023, which caused producer prices to escalate, retailers were “slow to reduce retail prices” even as producer prices initially declined.

Since April, producer prices for eggs have started to increase again, though egg production levels are anticipated to recover to pre-2023 levels by mid-2025. The report notes a broader concern regarding “inefficiencies in price transmission” across the food value chain, where input cost reductions are not always passed on to consumers at the retail level.

In contrast, retailers have demonstrated “restraint” with canned pilchards, an important and affordable protein source, where retail margins have declined over time to keep the product more accessible.

Alcoholic Beverages See Above-Average Inflation

Beyond essential foods, discretionary spending on alcoholic beverages is also feeling the pinch. The annual inflation rate for alcoholic beverages in August 2025 was recorded at 4.4%. This rate is higher than the overall headline inflation of 3.3%.

Breaking down the alcoholic beverage category, wine experienced the highest annual inflation at 5.3%, followed by spirits and liqueurs at 4.2%, and beer at 4.0%. Alcoholic beverages and tobacco collectively contributed 0.2 percentage points to the annual CPI change. These increases add to the financial strain on consumers who already face rising costs across various expenditure categories.

Broader Economic Context and Household Strain

The Cost-of-Living Report underscores that food and non-alcoholic beverages account for over 40% of expenditure for the poorest households, indicating the severe impact of food inflation on a significant portion of the population.

While not the sole focus, other economic factors exacerbate the pressure on household budgets, indirectly affecting the affordability of items like meat and alcohol. Administered prices for essential services, such as electricity and water, have seen significant cumulative increases between 2020 and March 2025, rising by 68% and 50% respectively, far exceeding general inflation.

Furthermore, aggressive interest rate hikes have led to a 28% increase in home loan repayments since 2022, placing further strain on homeowners’ finances.

Despite the economy showing a slight improvement with a 0.8% growth in Gross Domestic Product (GDP) in the second quarter of 2025, up from 0.1% earlier in the year, this growth must be contextualised against the persistent and often disproportionate rise in the cost of living.

As households continue to increase their spending, contributing significantly to GDP growth, they do so under increasing financial pressure, with wages often failing to keep pace with escalating costs.