“We want the Government to repeal the new Excise Tax on soft drinks in the next parliament session in April in 2015, as it won’t reduce non communicable diseases and people will continue to be affected by NCDs.”
Vanuatu Brewing Limited Financial Manager, Yoan Tabisal, makes the statement in a last ditch attempt to keep the prices of imported canned soft drinks from Fiji including Fanta, Coca Cola and Sprite, at their current supermarket prices of Vt80-85 a can and Vt100 a can at retail shops.
The Ministry of Health has introduced a sugary tax on canned soft drinks but not on bottled juices such as orange juice.
“The new tax won’t reduce obesity or the amputation of limbs because it is strictly for canned soft drinks but not for juices (such as orange juice) or sugary items such as ice cream,” the Financial Manager argues.
He says people will simply go for other juices and the NCDs will continue to affect them.
When the new tax is gazetted on January 1, 2015, the prices of soft drinks will go up by 30% and the small guy will need to spend Vt150 on a can of soft drink instead of Vt100.
The big plan for the company in the future is to produce more beverages.
“We are the largest manufacturer in Vanuatu employing 70 workers, 97% of whom are locals except for two or three expatriates,” he says.
Tusker Brewing Limited has invested heavily in the communities, sponsoring the Kiwanis Horse Race, Rotary Club, Fete de la musique, WSB Theatre, Vanuatu Golf Open and many more.
“With the new taxes, it will be difficult for the company to continue to support social programmes,” he says.
“One thing that Government does not seem to understand is that taxing our canned soft drinks products won’t stop people from switching from our canned soft drinks to taking sugary drinks from other fruit juices.”
The Financial Manager says there is a better way to combat the threat of NCD and that is by doing regular physical exercise.
“We have been working with Vasanoc to promote sports and we have plans to continue our support for major sports events including the Pacific Mini Games but this has yet to be finalised,” he says.
Asked how serious the rumours are that if the investment environment continues to deteriorate, Vanuatu Brewing Limited would have no choice but to relocate to New Caledonia, the Financial Manager replies that since 2009, the Government has increased the excise tax from 120 to 180 vatu on beer.
In 2010, the company asked the Government to reduce the tax and it reduced it to Vt140.
The increase has jeopardized the market prompting people to look for cheaper alcoholic drinks. The Solbrew is cheaper than Tusker.
“We have been losing 25% of our volume since 2008. The current free trade agreement does not provide a favourable environment for manufacturers either,” he says.
Asked what their predictions are taking into consideration the impact of the excise tax, he replies, “We have predicted a decrease of 10% from our sales next year and after that is still not known.
“Every year we make our investment plans but we will have to review our investment plans for next year and may even stop some of our investment plans.
“With the new tax looming we may have less volume to sell so we may stop some of our investment plans.”
Meanwhile the Financial Manager says the company injects Vt300 million into the Government revenue basket every year while the commercial banks contribute Vt5 million each over the same period.