A CHANGE IN BUYING HABITS
The Department of Trade and Industry warns retailers not to use the Tax Reform for Acceleration and Inclusion (Train) Act as an excuse to raise prices
As the new prices of sweetened beverages take effect this month, retail and wholesale chain Prince Hypermart is considering placing minimum orders for new stocks in anticipation of a change in buying habits.
“We are on a wait and see stance on how the market will respond to this price adjustment. On our end, we will be placing minimum orders (to suppliers/ manufacturers) for new stocks,” said president Robert Go, also president of Philippine Retailers Association (PRA)- Cebu Chapter.
Prince Hypermart has a million store members nationwide. Of the total membership, 60 percent are sari-store owners, while the rest are composed of corporate clients like catering services, food establishments, and large consumers.
The chain, according to Go, has yet to place new orders for sweetened beverages to their suppliers, as they are still disposing their old purchases.
President Rodrigo Duterte has signed the first package of the Tax Reform for Acceleration and Inclusion (Train) bill into law. It raised taxes on sweetened drinks, fuel and cars starting Jan. 1 to offset a reduction in income tax rates under tax reform program.
Based on the Train law, drinks that use purely caloric and non-caloric sweeteners like sweetened juice beverages; sweetened tea; carbonated beverages; flavored water; energy and sports drinks; powdered drinks not classified as milk, juice, tea, and coffee; as well as cereal and grain beverages will carry a P6 excise tax per liter.
Those using purely high fructose corn syrup will incur P12 excise tax per liter.
“We expect buyers to shift to other types of drinks. Assuming consumers buy less sweetened beverages, we expect our sari-sari store partners to buy less from us or they”ll stock fewer of these items,” said Go.
In a separate interview, Department of Trade and Industry (DTI) 7 Director Asteria Caberte said they have deployed teams on the field to constantly monitor unreasonable price hikes.
The agency announced that old inventories of sweetened beverages are free from excise tax that took effect at the start of the year, while the new ones will be subject to new price adjustment.
“At this point, there are no price hikes, If there is, it is not because of the excise tax,” said Caberte, adding that consumers may feel the impact of the new excise tax rates for sweetened beverages in three weeks as sellers or store owners replenish their inventory.
“Old inventories are not yet covered (by the new excise tax rate),” she said.
The DTI said it is thinking of freezing the prices of sodas and other sugar-sweetened beverages until the middle of the month.
At this point, there are no price hikes. If there is, it is not because of the excise tax. ASTERIA CABERTE Department of Trade and Industry 7 Director