Coke FEMSA to revisit $1B investment
Coca Cola FEMSA said it will review its $1 billion committed investments in the country if the taxation on sugar sweetened beverages (SSBs), in its current form, is passed into law.
Jorenz Tanada, Coca Cola FEMSA Philippines director for legal, told reporters covering the “Food & Beverage for All” forum that the P10 to P20 per liter tax on SSBs under House Bill No. 5636 will definitely affect the viability of their business and the overall industry.
“What we do know for certain that the originally proposed bill will not be viable at all,” he said.
At P10 tax per liter, he said “it will have an impact on our business.” With that, he said “then we will have to revisit.”
The current bill seeks to impose excise tax of P10 for locally sourced sugar and P20 for all other sweeteners per liter of SSBs.
Tanada stressed that what the industry need is a taxation regime that will make investments sustainable.
Coca Cola FEMSA has committed to fulfill its committed investments of $1 billion until 2022 based on the memorandum of agreement it signed with the Department of Trade and Industry in 2016.
“What we need is something sustainable and investors have a fair return on their investments,” stressed Tanada noting that the industry is “hand in hand with government” and is not really against taxation but discriminatory and regressive measure.
This is the reason that the company has been in constant touch with DTI regarding possible revenue measures. He lauded DTI for being receptive of its concern and makes sure that as a foreign investor “our contribution also will be taken into contribution as we continue to believe in the Philippines.”
Since the proposed SSB is supposedly more of a health measure than a revenue generating one by limiting the consumption of drinks that are considered unhealthy, the industry expects a decrease in consumption.
“If there is a decrease in consumption then we have to revisit and see how we can address this,” he reiterated.
He said they are very concerned about the bill and watching it very closely and evaluate all possible sources of risks.
He noted that Coke Litro, which currently costs P38 will become P48 per.
That will be discouraging consumers because only few Filipinos can afford that, he added.
Tanada, however, stressed that Coca Cola FEMSA is a strong believer of the Philippine economy and growth numbers and to continue to b viable.