Competition forces Tang to abandon RP production unit

Stiff competition from Eight O’Clock and Ponkana has forced Kraft’s Tang powdered juice to leave the country.

Industry sources disclosed that Kraft had transferred the production of Tang powdered juice from the Philippines to Thailand. Kraft is now importing Tang into the country from Thailand.

Eight O’Clock and Ponkana are produced by Sugarland which is now controlled by food and beverage giant San Miguel Corp.

Sugarland’s powdered juices have cornered 60 percent to 70 percent of the market, while Tang has to share the remaining 30 percent with the Kool Aid powdered juices. Kool Aid is also being produced by Tang.

Kraft is now reportedly seeking tariff relief from the government. Government slaps a three-percent tariff on imported inputs for powdered juice drinks.

The sources said Kraft is seeking a zero tariff rate.

Because of stiff competition, Kraft was forced to close down its Bicutan plant last year and transfer the production of its powdered juice products to Thailand.

Kraft’s Thailand plant ships most of its production to nine Asian countries, including Singapore, Hong Kong, Malaysia and the Philippines.

Kraft, sources said, wants to improve its share of the Philippine beverage market which is worth P100 billion a year in total sales.

The P100-billion a year estimate includes all categories, both alcoholic and non-alcoholic, fruit-based and powdered fruit-based and softdrinks.

Tang reportedly generated P1 billion in sales last year and expects the same sales level this year.