Soda makers eye more local sugar input

ORMOC CITY, Philippines — The administrator of the Sugar Regulatory Administration (SRA) is optimistic that the tax reform law will benefit the ailing Philippine sugar industry as soft drink producers signified interest to use local sugar which will be taxed less.

SRA administrator Hermenegildo Serafica yesterday said Coca-Cola, Pepsi Cola and RC Cola have considered to stop using high fructose corn syrup (HFCS) because while they can get it cheap, they have to pay a hefty tax of P12 per bottle under the Tax Reform for Acceleration and Inclusion (TRAIN) law.

But drinks sweetened with local sugar will only be taxed P6 per liter the under TRAIN law.

Serafica said Pepsi Cola has signified to the SRA that it would stop using HFCS and would use local sugar instead. Pepsi Cola also rerouted its HFCS orders to Pepsi Cola - Vietnam. 

Coca-Cola returned its HFCS orders to China, while RC Cola will export its HFCS. Both companies will also use local sugar.

In all, the three companies would use around nine million metric tons of local sugar, which is expected to revive the Philippine sugar industry, Serafica said.

There has been a row between sugar planters and soft drink companies over the regulation of the entry of HFCS. The TRAIN has apparently settled the issue by imposing a hefty tax on HFCS.

Serafica expressed confidence that the current supply of sugar in the country can meet the needs of the softdrink companies and others.

“Even last year, we had a big production. I am optimistic we can meet their requirements,” he said.