Tax hike on sweetened drinks could hurt sari-sari store sales

Beverage group warns higher prices could dampen demand for drinks.

Sari-sari stores could see lower beverage sales if the government pushes through with a proposed increase in sweetened beverage taxes.

That’s according to the Beverage Industry Association of the Philippines (BIAP), which warned that higher prices could discourage consumers from buying affected products.

BIAP President Juan Lorenzo Tañada said about 1.3 million sari-sari stores in the Philippines generate part of their sales from beverage products, making them vulnerable to a potential drop in demand.

The group is urging the government to defer the proposed tax increase under the ProGRESS (Promoting Growth, Revenue, and Equity towards Socio-economic Sustainability) Bill, citing rising food and transportation costs amid the Middle East crisis.

Under the proposal, the excise tax would rise from ₱6 to ₱20 per liter for beverages using sugar or other sweeteners, and from ₱12 to ₱40 per liter for drinks using high-fructose corn syrup.

Tañada raised the concerns at a recent Kapihan sa Manila Bay forum, saying the current economic situation may make the proposed increase ill-timed.

The government aims to generate additional revenue for public services and encourage lower sugar consumption through the measure.

Meanwhile, Philippine Institute for Development Studies senior research fellow John Paolo R. Rivera said obesity is influenced by several factors, including lifestyle, age, demographics, and education, and cannot be addressed through taxation alone.

BIAP called for further studies and consultations with affected stakeholders before the proposed increase is implemented.

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