Unilever backs lower tariffs on raw material imports

Unilever is supporting the call of local industries for lower tariffs on imported raw materials.

Unilever global chairman Antony Burgmans said yesterday that a regime of low tariff rates, free trade areas and globalization leads to efficient and effective industries which in the end benefits consumers.

Burgmans earlier paid a courtesy call on President Arroyo where he expressed Unilever’s concern about calls from some industries for tariff protection.

"Raising tariff on raw materials would affect other downstream industries and result in higher consumer prices," Burgmans warned.

Local midstream manufacturers in the petrochemical, textiles, paper and rubber industries are urging the government to raise tariffs to protect their industries upon the effectivity of the ASEAN Free Trade Agreement (AFTA) and the Most Favored Nation (MFN) tariff treatment.

Local downstream industries, on the other hand, warned that raising tariff would only benefit the midstream producers but adversely affect downstream manufacturer and eventually the consumers because of higher prices.

In a speech before members of the European Chamber of Commerce of the Philippines, Burgmans also noted the need for product specialization.

For instance, Unilever produces its shampoos in Thailand, toothpaste in Indonesia and deodorant sticks in the Philippines.

"Such specialization results in economies of scale and efficiency which ultimately benefits consumers," Burgmans said.

He said countries like the Philippines can still be competitive by coming up with products which it can then export to other countries as is happening with Unilever’s production of the deodorant mini-stick.