Proposed new tax on SSBs seen to impact on investments – BIAP

The planned additional taxes on sugar sweetened beverages (SSBs) will impact not just on the multinational firms’ investments but also the 35,000 direct industry workers as well as other downstream and upstream industries, including the livelihood of 1.3 million saris-sari stores nationwide which incomes rely largely from sale of SSBs.

This was stressed by Atty. Adel Tamano, head of the legislative committee of the Beverage Industry Association of the Philippines (BIAP), in an interview with the Business Bulletin cited data from the Philippine Association of Stores and Carinderia Owners (Pasco), which showed that 30-40 percent of the income of sari-sari store owners come from the sale of coffee, juice and carbonated drinks.

“If combined with all other beverages, their income from sweetened drinks would nearly rich 50 percent. So people should consider farmers, sarisari stores and carinderias because if we start looking at that, the footprint is very big,” said Tamano.

Meantime, Tamano said that this industry investments have been estimated at R130 billion conservatively as players have been investing annually. For instance, Coca-Cola FEMSA already informed the Department of Trade and Industry of its plan to invest $2 billion up to 2020 in the country.

“To be very honest, if business goes down that is a disincentive to invest because you only set up production lines if demand is there, so why introduce new lines with low demand. And I think we have very honest investors who make investments that are based on a fair playing field,” he said.

Tamano did not divulge exactly the figure but said the industry has been growing because of the young demographics, BPO and strong OFW remittances. But higher prices of sweetened beverages will make prices more expensive, dampening consumption. (BCM)