Soft drinks makers rail against Budget duty increase

By RJ Whitehead

- Last updated on GMT

Soft drinks makers rail against Budget duty increase

Related tags: Soft drink

India's INR140bn (US$2.8bn) soft drink industry has called on the government to reverse an increase in excise duty on beverages. 

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. 

Related topics: Policy, South Asia, Beverages

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