PHILIPPINES: Sugar tax risks US$1 billion in planned Coca Cola investments
Published: 09/14/2017, 9:11:47 AM
Coca-Cola's franchise bottler in the Philippines said Thursday it might rethink its US$1 billion investment plan, as a possible tax on sugar-sweetened drinks could slash sales volume by as much as 80%, according to the Philippines' ABS CBN News.
The sales losses could also hurt sari-sari stores, like in Mexico, where a similar tax on sugary beverages affected some 30,000 mom and pop stores, said Coca Cola FEMSA legal and corporate affairs director Jorenz Tanada.
"What we want to do is revisit our investment and expansion plans here in the Philippines," Tanada told ANC's Early Edition.
"We have to base our expansion plans and our investments and measure them against what's going to happen," he said.
Tanada said the company planned to spend up to US$200 million per year until 2022 to buy more delivery trucks and bottles and expand its current network of 19 plants.
President Rodrigo Duterte is seeking higher taxes on sugar-sweetened drinks and fuel to offset a planned reduction in personal income tax rates. The first tranche of reforms may take effect as early as next year.
Finance Undersecretary Karl Kendrick Chua had rejected observations that the tax overhaul was anti-poor.
Cash transfers to the poorest of the poor would be increased by PHP1,200 (US$23.4) per year while jeepney drivers would be given assistance to shift to more fuel-efficient engines, Chua earlier said.
Increasing consumption taxes in a country with uneven wealth distribution like the Philippines is "very unfortunate, very unfair and very inequitable," said Sonny Africa, executive director of thin-tank IBON Foundation.