SRA delays decision on HFCS disposal

Sugar Regulatory Administration (SRA) has delayed the decision on how to go about the 15,000 metric tons unused high fructose corn syrup (HFCS) stocks of Pepsi Cola Products Philippines, Inc. (PCPPI) currently stuck in the Bureau of Customs (BOC), costing the cola company R1.5 million a day in storage fees.

"The SRA Board deferred action pending clarification by Pepsi on certain issues relative to its disposal plan," SRA board member Roland Beltran said in a text message. SRA will determine whether or not to allow PCPPI to sell its HFCS stocks in the country.

To recall, soft drink manufacturers earlier scrambled to dispose their HFCS, which they earlier used as a cheaper alternative to sugar to avoid the higher tax newly imposed on sugar-sweetened beverages (SSB) under the Package 1 of the TRAIN Law.

Once without taxes, SSBs have been slapped a tax rate of R6 per liter while drinks with HFCS are taxed R12 per liter. Beverages that normally has high amount of HFCS are soft drinks and energy drinks.

Because of this, most beverage companies shifted their formula back to 100 percent sugar, from the mix of 60 percent sugar and 40 percent HFCS.

To help resolve the issue, SRA allowed these companies to export their unused HFCS. But not all of them were successful in doing so, especially PCPPI.

Based on an existing data, the unused HFCS stocks of PCPPI still stood around 15,000 MT, while Coca-Cola Femsa Philippines, Inc. (Coke) had to dispose 5,000 MT.

"Coke no longer has an issue. They were able to export all of their unused HFCS. The problem is with PCPPI, it has 15,000 MT to dispose," SRA Administrator Hermenegildo Serafica said.

Serafica said PCPPI was supposed to export their unused HFCS to Suntory PepsiCo Vietnam Beverage but the latter found it difficult to accept it due to strict importation rules of Vietnam.

PCPPI is also finding it hard to ship the HFCS back to China because it has to be stored in a stainless steel packaging.

"That's the problem now. They are asking us [what to do] because some of them already expired so it's already unfit for human consumption. We told them: 'you better write us how to dispose and make sure you have disposal plans'," Serafica said.

PCPPI then told SRA that portions of its unused HFCS can still be sold to the food industry. If so, SRA will also require them to disclose their buyers on health issue. But SRA is also cautious so as not to agitate the farmers since HFCS stocks have already been classified as “D,” meaning the product is for export market.

Serafica said PCPPI has to pay R1.5 million in daily storage fees to Customs.

Because the SRA Board is yet to decide on this issue, Beltran said PCPPI has to continue paying to BOC until they come up with a plan.