August 30, 2019
Karl R. Ocampo (Philippine Daily Inquirer) | https://bit.ly/2k59CxG
Wolf in sheep’s clothing.
This was how a sugar industry leader described Coca-Cola Beverages Philippines, Inc. after the company asked the government to allow it to switch back to using high-fructose corn syrup (HFCS) in its operations and lower the tax imposed on beverages using the sweetener.
This developed as Coca-Cola Philippines president Winn Everhart said in a recent television interview that the company’s business in the country “is very resilient,” yet made no mention of the company’s decision to switch to using HFCS.
Coca-Cola, which has been operating for more than a century in the Philippines, decided to reformulate its drinks last year by using 100-percent sugar after the government imposed higher taxes on HFCS.
Other companies like Pepsi Cola Products Philippines Inc. and RC Cola Philippines also followed suit, thus boding well for the local industry given the spike in the demand for the commodity.
In a letter obtained by the Inquirer, Coca-Cola chief financial officer Gareth McGeown asked the Department of Finance (DOF) last month to slash the tax rate for beverages using HFCS to P6 a liter from the current P12 a liter so it could abandon using 100-percent sugar.
McGeown said this would “allow for the continued growth of the industry and maintain, or even improve, the level of tax collections,” adding that the policy shift would not result to any revenue loss.
“As one of the biggest customers of refined sugar in the country, we have three key challenges regarding this most critical raw material for our manufacturing operations, specifically – (i) the prohibitive high cost of local sugar vs world markets, (ii) the deficit in local sugar production versus national requirements, and (iii) the inconsistent quality of local sugar,” the letter said.
“Given this reality, we feel that a sugar consumption credit scheme wherein local industrial users will be authorized to directly import sugar and/or alternative sweeteners from overseas sources … would be helpful,” it added.
Sugar industry groups said the beverage giant’s latest move felt like “we were stabbed [in] the back,” since Coke executives, including Everhart, met with stakeholders last year in Bacolod City and promised to use local sugar for its operations hereon.
“We have been stabbed in the back by Coke. They are wolves in sheep’s clothing … He [Everhart] promised us he will be buying local sugar and no more HFCS, and he promised to help the local sugar industry… Coke is a traitor and you can quote me on that,” United Sugar Federation president Manuel Lamata said. The group is composed of sugar farmers and millers.
Sugar Regulatory Administration (SRA) board member Roland Beltran noted there was no need for the company to resurrect HFCS, saying it had just secured 15,000 metric tons (MT) of imported sugar for its operations.
“It must be recalled that Coca-Cola pledged to help and support the sugarcane industry,” he said.
To recall, the SRA has allowed the private sector to import as much as 250,000 MT of sugar following the projected increase in demand amid low domestic production.