Filipino beer producers are campaigning against the decision by the country's president Gloria Macapagal Arroyo to impose further "sin taxes" on beer in forthcoming tax adjustments. Beer producers argued that they were already among the country's biggest taxpayers and that the government needs to look elsewhere to raise funds for public spending.

The calls have been led by food and beverage giant San Miguel which said it paid more than P10 billion in excise taxes annually. It is arguing that the rises will hurt consumption and be at the expense of the poorer consumer. Prices will rise at the expense of poor consumers.

We will be subjected to higher taxes even if we are already among the heavily taxed, if not most heavily taxed company in the Philippines," said a San Miguel source. The sad thing is that volume (of beer consumption) in countries like Thailand, Vietnam and China are increasing while ours is stagnant.

We are the only emerging market where consumption has not improved. The proposal will allow the government to index the taxation rate on alcohol to inflation and adjust it once every two years.

17 January, 2003