MANILA, Philippines - Warning of massive job losses, rivals San Miguel Brewery Inc. and Asia Brewery Inc. have joined hands in opposing a proposed measure to impose a unitary tax on alcohol products.
The two beer manufacturers said they are not against an increase in specific taxes as they recognize government's need to raise revenues. However, they said a unitary or single tax system "is destructive and not the way to go."
They also said that a unitary tax will be "excessive," threatening the viability of their products.
Department of Finance-backed House Bill 5727 proposes a uniform tax rate of P25 per liter for all beer products, regardless whether they are currently classified as low-priced, medium-priced or high-priced.
The amount is a 140% increase from the P10.41 per liter current tax rate of low-priced beer.
"HB 5727 is anti-poor since it not only makes affordable and healthy beer products out of their reach but it will also have a profound impact on the honest livelihoods of hundreds of thousands of low income families running these small stores," San Miguel and ABI said in a joint statement.
The companies warned that poor consumers, who will no longer be able to afford beer, may shift to hard liquor or unregulated liquor products.
They argued that the government must keep the current three-tiered tax structure Republic Act 9334 as it "has been effective in promoting both volumes and tax revenue collection growth from the beer industry."
They said from 2004 to 2011, excise tax collection from the beer industry increased by 43% .
The two manufacturers also expressed concerned about the impact of the bill to the industry, including its associated industries and workers.
"The livelihood of 8,000 workers directly associated with beer production and sales and tens of thousands more involved in the distribution of beer products to retail outlets will be adversely affected," they said.
"It is our firm conviction that retaining the proven three-tiered structure for specific taxes with provisions for inflation adjustments will provide a win-win solution for the government and the industry," they added.