Alliance Select Foods sees windfall if Phl qualifies for EU GSP+

MANILA, Philippines - Listed tuna and salmon processor Alliance Select Foods International Inc. expects a windfall from a tariff reduction scheme for goods entering the European Union (EU).

The Philippine government’s move to apply for the bloc’s Generalized Scheme of Preferences Plus (GSP+) will make tuna exports more competitive, the firm said in a disclosure.

“EU is Alliance Select’s major market and the GSP+ will allow the company to further expand its sales in the region,” the tuna exporter said.

“A level playing field with other canned tuna exporting countries will enable Alliance Select to make inroads in both the established and emerging markets in the EU,” it added.

Last week, the Philippine government submitted its application for the tariff reduction system. Should the Philippines qualify for EU GSP+ status, the country’s exports to the EU are expected to rise as more products are allowed to enter the bloc at zero duty.

To date, Philippine tuna exporters are slapped with a tariff of 20.5-24 percent for all canned tuna products.

“Once the GSP+ is implemented for the Philippines, the country’s various exports to the EU, among them canned tuna, will enjoy duty-free access to the region,” Alliance Select said.

Hence, prices of Philippines’ tuna exports would be more attractive compared with main rivals like Thailand, which would continue paying 24 percent import duties.

“As a result, the company expects a significant boost to its canned tuna sales once the new tariff regime comes into effect,” Alliance Select said.

Initial estimates indicate that the GSP+ could increase Philippine exports to the EU by 611.8 million euros, representing around 11.96 percent expansion over 2012 Philippine exports to the EU, data from the Department of Trade and Industry showed.

For its part, Alliance Select said the combination of lower tariffs and the start of its fishing operations in the Philippines and Indonesia would allow the company to return to historical growth and profitability in 2014.

Alliance Select spent $17 million for its Philippine operations and $4 million for Indonesia this year.

In January to September, profits of Alliance Select plunged to $63,000 from $1.62 million a year ago as higher sales were offset by the spike in tuna cost of raw materials like tuna.

The firm started engaging in tuna processing, canning, and export of canned tuna products through its plant in Gen. Santos City in 2004.