Monde Nissin pumps on noodles’ exclusion from salt tax

Shares of Monde Nissin [MONDE 8.10 6.6%; 56% avgVol] were up as high as 7.5% in intra-day trading yesterday after Secretary of Finance Benjamin Diokno said in a press briefing that instant noodles would not be subjected to a new tax package that is aimed at foods that exceed Department of Health (DoH) specifications for salt content [link].

Mr. Diokno said that the Department of Finance (DoF) is consulting with the DoH on an appropriate list of foods that should be subjected to the tax, which he said may include “snacks, chips, ‘yun talaga siguro.” The overall tax package, which would also address excess sugar, is forecasted to reduce the consumption of junk food by 21%.

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The DoF has been scrambling for years to find new revenue streams after COVID decimated the national coffers and subsequent budgets have only served to increase the deficit. I saw some people online claim that MONDE must have done some intense lobbying behind the scenes to have had its bedrock product specifically excluded from the tax, considering how salty instant noodles are, but I think that analysis ignores the purpose of the tax plan and the populist limitations that might constrain the DoF’s implementation.

MONDE’s instant noodles are cheap meal replacements for people who cannot afford much else, while the tax plan is intended to take aim at snacky-type foods that might be considered more of a bad habit. I don’t think noodles were excluded to spare MONDE from the taxman’s wrath, but rather, they were excluded to spare the government from the people’s wrath that could come from raising the cost of what many consider to be something of a last-resort meal.

If the DoF could get away with taxing noodles, it would. But it probably can’t, so MONDE’s noodle business is safe (for now).