Policy Picks: Sugar taxes in Malaysia and Pakistan, stricter import rules in South Korea and more feature in our round-up

By Pearly Neo contact

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Malaysia has implemented its sugar tax targeting sugar-sweetened beverages (SSBs) in the country. ©Getty Images
Malaysia has implemented its sugar tax targeting sugar-sweetened beverages (SSBs) in the country. ©Getty Images

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Sugar taxes in Malaysia and Pakistan, stricter import rules in South Korea and more feature in this edition of Policy Picks.

Malaysia sugar tax: Innovation and reformulation underway, but is it enough?

Malaysia has implemented its sugar tax targeting sugar-sweetened beverages (SSBs) in the country​, which has led major beverage companies to reformulate products in an attempt to curb its impact – but is this enough to meet the government’s goal of combatting chronic diseases?

When the government announced the sugar tax​ implementation in the nation’s Budget 2019 back in November last year, its primary objective was stated to be ‘to address the issue […] of nearly one out of two Malaysians being obese’​.

F&N Malaysia initially reacted by announcing that it was looking at a possible price increase for 90% of its products​, which it later retracted​ and said that it would be reformulating some 70% of its products​ instead.

This appeared to be exactly what the government was aiming for with the sugar tax: Driving product reformulation to decrease sugar content and thus public consumption, which would supposedly also decrease local chronic disease rates. So can this be considered a definitive ‘good move’?

Stricter import rules: South Korea upgrades enforcement regulations for inbound food products

South Korea has upgraded the enforcement regulations for its Imported Food Act​, with an import sanitation appraisal now mandatory for multiple types of food products.

According to Korea’s National Law Information Centre, as of June 19 the new sanitation assessment for imports is now necessary for foods where the exporter has requested for special handling (as per the ‘Food subject to special management’ clause in Article 10-2).

Food subject to special management here refers to food products that South Korea uses as food, which are not used or managed as food in an exporting country, such as fish head and internal organs.

“[The] establishments and/or operators of such manufacturing establishments overseas [that produce such foods] shall apply to the Director of Food and Drug Safety [at MFDS] via the governments of [the relevant] exporting countries for registration,”​ said the new regulations.

‘No more protectionism’: Boost for manufacturers as Malaysia stands firm on liberalisation of sugar market

Malaysian trade officials have insisted they are standing firm on a decision to grant sugar import licenses​ to eight Sarawak food and beverage manufacturers, allowing them to bypass local sugar refiners, despite vehement protests from the latter.

The import licenses were for up to 60% of the manufacturers’ sugar requirements, and signals a move by the government to liberalise the historically-monopolised sugar market, which is currently dominated by sugar refiners MSM Malaysia Bhd and Central Sugars Refinery Sdn Bhd (CSR).

In a statement, Deputy Domestic Minister Chong Chieng Jen from the Malaysian Ministry of Trade and Consumer Affairs (KPDNHEP) said that no reversals would be made for the import permits, and instead the ministry had plans to grant more of these to other companies across the country moving forward.

Taxes galore: Pakistan to double sugar taxation as part of effort to secure IMF bailout funds

The Pakistani government will be doubling the country’s sugar tax to 17%​ as well as implementing a raft of other levies, as revealed in the country’s recent Federal Budget 2019-20 announcement.

At present, sugar in the country is subject to an 8% sales tax, which led to a tax collection of some PKR18bn (US$115mn) for the incumbent Pakistan Tehreek-e-Insaf (PTI) government, but this is ‘lower than its actual potential’​, according to Pakistani State Minister of Revenue Hammad Azhar.

Presenting the budget at the National Assembly, Azhar said that: “To maximise this tax gap and to harmonise its rate with other items, it is proposed that the sales tax rate on sugar may be enhanced to 17%.”

Cheap, dangerous oil: Indian FDA warning over adulterated products amid FSSAI rule change

The Tamil Nadu Food Safety and Drug Adminstration Department has warned the Indian public about the continued dangers of adulterated edible oil​ despite a recent labelling change made by the Food Safety and Standards Authority of India (FSSAI).

The state government food safety agency conducted a raid on a local oil mill earlier this year, and issued the warning after it discovered that higher-priced oils from sesame and groundnut were being adulterated with palm oil.

“[We found that] palm oil was being mixed with sesame oil and groundnut oil, [and unaware consumers were purchasing these] because of the cheap price,”​ said Tamil Nadu Food Safety and Drug Adminstration Department Designated Officer Dr R. Chithra.

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