The Effects of Excise Tax on Pricing Strategies: Evidence from Zambian Breweries Plc

This study examined the impact of excise tax on the operations, financial performance, and strategic decision-making of Zambian Breweries Plc., a leading player in Zambia’s brewery sector. The research was motivated by increasing concern that rising excise duties are eroding profitability, constraining expansion, and weakening competitiveness in the alcohol manufacturing industry. Guided by objectives to identify key issues arising from excise taxation, analyze its effects on financial performance and competitiveness, and evaluate organizational responses, the study adopted a qualitative research design. Data were collected through semi-structured interviews with managerial and operational staff, providing insights into practical challenges associated with tax pressures. Findings indicate that excise taxation significantly increases production costs, compresses profit margins, and limits capital available for investment. Frequent and unpredictable tax changes disrupt financial planning and strategic decision-making, forcing firms to prioritize compliance over innovation and expansion. The study further reveals that pricing adjustments driven by tax increases may reduce competitiveness relative to informal or untaxed producers. Zambian Breweries has responded through adaptive strategies such as cost optimization, prioritization of core brands, and cautious investment planning. These responses align with theoretical frameworks including the Resource-Based View, Agency Theory, and Stakeholder Theory. The study concludes that while excise taxation is essential for public revenue generation, its volatility can hinder private sector growth and sustainability. It recommends a more stable and consultative excise tax framework to balance government revenue objectives with industry competitiveness and long-term economic development.