Beverage giants buck additional tax on soft drinks

MANILA, Philippines - The country’s beverage industry, led by global giants Coca-Cola and Pepsi, has opposed a proposal to impose additional tax on soft drinks and other sugar-sweetened drinks, saying it would be a violation of the Equal Protection Clause and would not solve the problem of obesity.

Authored by Nueva Ecija Rep. Estrellita Suansing, House Bill 3365 seeks to impose a 10 percent ad valorem tax on carbonated and non-carbonated drinks in the hope of weaning consumers off sugary drinks to help prevent weight gain and other health problems.

“Taxation is the wrong policy tool to address obesity and other related health issues. There is no scientific evidence which shows a direct correlation between soft drink consumption and obesity rates. On a mean one-day per capita food consumption by food groups in the Philippines, calories from sugar and syrup constitute only 1.9 percent of total food intake,” the Beverage Industry Association of the Philippines (BIAP) said in a position paper submitted to Congress last week.

BIAP said discriminating against soft drinks and carbonated drinks without considering other food and beverages is unfair, and may be a violation of equal protection guaranteed by the Constitution.

“People consume many different foods and beverages, so no one single food or beverage alone is responsible for people becoming overweight or obese. Hence, it is important to balance the calories you take in with the calories you burn by consuming a sensible, balanced diet combined with regular physical activity,” BIAP said.

BIAP also pointed out all beverages produced by its members are safe, quality products.

“This is the most important commitment we make…any ingredient we use must comply with all applicable regulations in the countries where our products are sold. We make this statement with the assurance that all our products available in the market have been approved by the Food and Drug Administration of the Department of Health,” the BIAP said.

Acknowledging obesity as a serious and complex global health problem, BIAP said it is committed to develop workable solutions to address the issue of overweight.

For one, majority of the BIAP members support the voluntary disclosure of caloric content of their products through the front-of-pack labeling in partnership with the Department of Health through the Food and Drug Administration.

BIAP said the proposed additional tax would discourage investments in the industry and the country as well, thereby affecting the local economy.

Aside from this, the additional tax may result in jobs being lost and lower tax revenues as affected businesses pass on the costs to consumers to remain competitive, the BIAP said.

“A tax on soft drinks and carbonated drinks will imperil the jobs and livelihood of millions of Filipinos who are involved in the beverage industry, including 1.3 million sari-sari store owners, truckers and at least 700,000 sugar producers,” the BIAP said.