Group bucks planned tax on sugar-laced drinks

Manufacturers of sugar-sweetened drinks are opposing the plan to slap a P10-a-liter excise tax on their products under a bill consolidated with the government’s first tax reform package as they claimed higher prices would burden consumers and result in job cuts in their production plants.

In a May 3 supplemental position paper on House Bill (HB) No. 292 authored by Nueva Ecija Rep. Estrellita Suansing, the Beverage Industry Association of the Philippines (BIAP) said the proposed excise tax would raise prices of several consumer goods and be a burden to consumers.

“As the primary market of the sari-sari stores are middle- and low-income earners, we note that the beverages that will be affected by the proposed tax are those consumed by majority of Filipinos, particularly those in the lower socioeconomic classes. The latest Family Income and Expenditure Survey of the Philippine Statistics Authority also shows that close to 40 percent of the income of an average family is spent on food and nonalcoholic beverages. Items like coffee, juice and soft drinks will become more expensive for ordinary Filipino consumers and any upward adjustment in prices of these beverages would impact their purchasing power,” BIAP explained.

Citing a University of Asia and the Pacific economic impact study in 2016, BIAP said the average prices of instant coffee would jump to P8 from P5; powdered concentrate to P19 from P9, and tea drinks to P30 from P20.

BIAP also warned of job losses, noting that BIAP member-firms employed more than 30,000 workers and that for each direct job, “an additional six to 10 other people are employed in secondary, support or allied services.”

“Sari-sari stores contribute to about 36 percent of the sales of most fast-moving consumer goods. The proposed tax on sweetened beverages will then have a negative impact on the livelihood of millions of Filipinos involved in the retail industry, particularly those with sari-sari stores, who on average earn a mere P800 a day. A third of the income of these sari-sari store owners are from the sweetened beverages, which HB 292 intends to tax,” BIAP added. —BEN O. DE VERA