Zest-O keen on overseas expansion

MANILA, Philippines — Beverage maker Zest-O Corp. is putting more focus on expanding its overseas business as it reels from the effects of the higher tax imposed on sweetened beverages.

Zest-O founder Alfredo Yao told reporters in a chance interview the company’s direction is to focus overseas as the domestic market has yet to fully adjust to the higher tax on sugar beverages.

“Zest-O caters to the masses. The price has gone up, of course, there is adjustment period. Everywhere with taxes imposed on drinks, there is an adjustment period…For us, it may take another year, around two years (for market to adjust),” he said.

He said the company saw its sales volume decline by 30 percent following the implementation of the higher taxes.

Under the Tax Reform for Acceleration and Inclusion Law which took effect on Jan.1 last year, the government reduced personal income tax rates and slapped higher taxes on fuel, cars, tobacco and sugary beverages.

Apart from Zest-O’s market being price sensitive, Yao said there has also been a shift by some consumers to buy other beverages like water.

Still, he said the company is hopeful it could recover and register a smaller drop in sales this year.

While the market is adjusting to the higher taxes, he said Zest-O is focusing on expanding overseas.

The company has plants in Indonesia and Vietnam which do not only produce beverage products, but dairy products as well.

Yao said Zest-O is likewise considering expanding operations in China where it also has an existing plant.

He also said an acquisition would likely be made and announced by next week.

It is not clear whether Zest-O or Macay Holdings Inc., which is chaired by Yao and serves as the parent company of ARC Refreshments Corp., would be making the acquisition, as he declined to provide details.