Coca-Cola commits to hike local sugar procurement

Beverage giant Coca-Cola Femsa Philippines has vowed to increase its local sugar procurement provided the Sugar Regulatory Administration (SRA) allows its access to the export market which is significantly cheaper than the domestic one, the Department of Agriculture (DA) said.

During the SRA’s latest board meeting, Agriculture Secretary Emmanuel Piñol said stakeholders agreed that Sugar Order No.3, which puts a cap on the volume of high fructose syrup to be imported, remains valid and legal despite opposition to it.

Piñol said Coca-Cola agreed to make advance purchase of its 2018 sugar requirement to stabilize the current oversupply in the country.

“They also agreed to increase even more their utilization of sugar provided that they’ll be given access to D sugar, “Piñol said.

The SRA classifies sugar into “A” for sugar for export to the US, “B” for domestic consumption, “C” for reserves, “D” for export to countries other than the US and “E” for food local processors.

Coca-Cola was supposed to purchase “B” sugar since it is a domestic consumer. But “D” sugar is significantly cheaper than “B” by about P300 per 50-kilogram bag based on SRA’s latest price inventory.

Pepsi-Cola Products Philippines Inc. is also making a similar request.

“Let’s look at Coke and PepsiCola as multinationals. That’s why my instruction (to SRA) is to look into the request to access the D sugar. And there was no opposition from SRA,” Piñol said.

Currently, Coca-Cola uses 90 percent HFCS and just 10 percent sugar. Piñol said Coca-Cola is willing to adjust to up to 80:20 ratio.

Coca-Cola remains the biggest company consumer of commercial sweeteners. Approximately 40 percent of the country’s total sugar production goes to the beverage industry.

“They said that if we can as- sure them access to the D sugar, they will even increase their consumption of local sugar provided they will be given enough time to adjust their manufacturing process,” the agri chief said.

“I actually asked for a higher ratio, 70:30. But that was just my request. We have to understand that they are businessmen. If we will give them access to the D sugar, they said we might be surprised with the ratio (that they are willing to increase),” Piñol added.

Coca-Cola has also agreed to withdraw the case it filed against the DA, SRA, Bureau of Customs and other members of the Sugar Board.

The company has been given six months to restructure its production process to avoid a surge in soft drink prices.

Piñol has instructed SRA administrator Anna Rosario Paner to accept Coca-Cola’s request to have its HFCS released.

Approximately 300 containers of HFCS imported by CocaCola have been stalled at the Customs.