Coca-Cola Femsa Philippines Inc. said that it had decided to cut down on workers amid changes in the beverage industry and the business environment, calling it a “very difficult decision.”
In a statement to the Inquirer, the company behind the popular carbonated soft drink said that the decision to restructure was carried out after a careful assessment of various factors, such as operational efficiency, and the evolving regulatory environment.
The firm deferred from disclosing the number of workers affected. However, according to a report from the labor sector-oriented Center for People’s Media, around 600 workers across the country would lose their jobs.
A representative of Coca-Cola deferred from expounding beyond what the statement said.
“In light of recent developments within the beverage industry and in the business landscape as a whole, the Coca-Cola System is undergoing an organizational structure assessment. This involved a comprehensive review of the roles and responsibilities within Coca-Cola FEMSA,” the company said.
“This restructuring has been a very difficult decision. It was carried out only after an exhaustive and conscientious assessment of the evolving regulatory environment, our operational efficiency, and consequent performance in the market,” it added.
This comes shortly after the passage of the Train law in December last year, the first among a series of tax packages. It lowered the personal income tax while increasing consumption taxes, including sugar sweetened beverages.
The Train law imposes a P6/liter tax on beverages using caloric and noncaloric sweeteners and P12/liter on beverages using high fructose corn syrup (HFCS).
Industry sources previously said that this would hamper demand, especially since consumers would be shouldering the added cost.
Juan Lorenzo Tañada, company director for legal and corporate affairs, told reporters in an interview last year that a decrease in consumption rates would push the company to reevaluate its plan to have an additional investment in the country, warning that this was what any other business would do.
The company previously announced its plan to invest around close to $1 billion in the country up to 2022.
Back when Tañada made this comment, the tax on sweetened beverages had been proposed under a different rate, particularly a levy of P10 a liter for beverages using local sugar and P20 for those using imported sugar.
“We are grateful for the valuable contributions of those who were affected and thank them for being part of the company. Rest assured that we will treat the people who will be affected with dignity, fairness, and respect throughout this process,” the company added in its statement.
“Everyone will be given career transition support, as well as separation packages that go beyond what is mandated by law,” it concluded./ac