Snack and beverage company Mondelez Philippines asked the government to conduct more studies on the proposed tax rates on sugar-sweetened beverages.
“We are not against taxation. We want to pay our own share of tax. What we are against is the way the bill is drafted. We feel that the tax is premature in the sense that not enough discussion has happened,” Mondelez Philippines country head Ashish Pisharodi said, referring to House Bill No. 5636 which was passed by the House of Representatives.
Mondelez, which produces powdered juice drink under the Tang brand, also called on the government to conduct a study that would provide data supporting its claim that sugar was a cause of obesity among Filipinos.
Pisharodi said the bill, which would impose an extra P10 or P20 per liter tax on all SSBs on top of all other existing taxes such as VAT, would make the cost of SSBs beyond the reach of consumers in the D and E income segments.
Mondelez head for corporate and government affairs Shanahan Chua said the bill would impose P10-per-liter tax on beverages using local sugar and P20 per liter on imported juices, ready-to-drink beverages and softdrinks.
Chan said this would mean that a sachet of Tang juice costing about P9 to P10 per pack to produce a liter of juice would cost P30 per sachet under the proposed measure.
“This will be awful for us since we import our Tang products from Thailand. It will affect sales and market share in as much as all SSB manufacturers will suffer the same as us,” Chua said.
Pisharodi said the “bottomline is that if Tang is taxed P20, nobody will buy it. Then the government loses on taxes also.”
He said the Beverage Industry Association of the Philippines, which Mondelez is a member of, was talking the Senate committee on ways and means to allow taxation on SBBs be based on sugar content, instead of volume.
“We urge to government to take a step back and continue the dialog with us. But if they’re looking at imposing the tax on their own timeline, I think the Senate position is a better alternative” he said.