Sugar sector questions low-tariff importation of powdered juice products by food firm

The local sugar industry and members of Congress are calling for an investigation on what they described as "anomalous and irregular" importation of powdered juices by a multinational company at very low tariff rates.

The Confederation of Sugar Producers Associations (Confed), the country’s largest organization of sugar farmers, warned yesterday that the importation by Kraft last May 10 of Tang powdered juicers from Thailand at a mere three percent tariff instead of 48 percent as mandated by Executive Order No. 295 and of Kool Aid juicers powdered beverages at zero duty will spell the end of the local sugar sector.

Under EO 295 signed by President Arroyo in March 2004, a 48-percent import duty shall be imposed on shipments with more than 65 percent sugar content in dry weight and have ingredients other than flavoring and coloring as required by the Tariff and Customs Code.

The Sugar Regulatory Administration (SRA) agro-industrial laboratory analyzed the said importations and discovered that Tang powdered juicers as well as Kool Aid juicers being imported by Kraft both contain over 90 percent sucrose. "Continued importation of products with high amounts of sugar at very low tariff rates by a select group of importers will not only kill the local sugar industry and displace hundreds of thousands of sugar workers but also local juice manufacturers who choose to pay the proper duties to support the country," Confed president Rey Bantug said.

Last Thursday, Bacolod Rep. Monico Puentebella in a privilege speech said EO 295 is very specific – that if imported powdered juices contain over 65 percent sugar and have other ingredients in addition to flavoring and coloring, their tariff is 48 percent.

The President has also issued memorandum order 134 which directed the Department of Finance and its attached agencies, particularly the Bureau of Customs and Bureau of Internal Revenue, to consult and coordinate with the SRA in determining the appropriate classification of sugar products for certain purposes including the imposition of proper import duties and other taxes.

The Tariff Commission, in an opinion signed by Edgardo Maralit, classified Kraft’s imports under three-percent duty.

The SRA filed a case before the Bureau of Customs‚ valuation and classification review committee (VCRC). Puentebella said that the committee merely affirmed the opinion of Maralit.