India
Soft drinks makers rail against Budget duty increase
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Last week, finance minister Arun Jaitley announced in the Union Budget that duty on aerated drinks and packaged water would increase from 18% to 21%, meaning that the price of drinks would rise by INR1-2 with immediate effect.
In a statement, the Indian Beverage Association said: “We urge the finance minister to reconsider the latest increase in excise duty. The viability of the industry could be in grave danger because of such a consistent adversarial tax approach.”
Major manufacturers including Coca-Cola and PepsiCo have been contending with single-digit volume growth as a result of slowing sales and increased health awareness among consumers. Recently, Coca-Cola India was forced to shutter three of its bottling plants in the wake of subdued demand.
"Industry growth has slowed down to under 4% in 2015," the IBA said, adding that last week’s Budget announcement made this the third consecutive increase in excise duty since 2014.