7-Eleven, small stores report sales hit due to sugary drinks tax

Warren de Guzman, ABS-CBN News

Posted at Mar 19 2018 04:08 PM

MANILA - Higher excise taxes on sugar-sweetened drinks reduced soft drink sales at 7-Eleven stores in the Philippines by around 10 percent, its operator said Monday.

The new duties also shifted some demand to water and tea, Philippine Seven Corp CEO Jose Victor Paterno said.

A tax on sugary drinks is "not very good," based on the experience of Mexico, Paterno said. Philippine authorities' decision to impose the tax at the origin, instead of at the point of sale, "is the right way to do it," he said.

Starting in January, drinks with caloric and non-caloric sweeteners were taxed P6 per liter while those using high-fructose corn syrup, a cheap sugar substitute, were charged P12 per liter.

The tax on sugary drinks is among duties that are meant to offset a reduction in personal income tax rates under the first package of tax reforms.

Same store sales expected to be "good," notwithstanding higher tobacco taxes, said Paterno, adding 7-Eleven planned to open up to 375 stores this year.

Small stores and eateries reported sugary drinks sales declines, also due to the new taxes, according to the industry group PASCO or the Philippine Association of Small Store and Carinderia Owners.