Coca-Cola in Portugal has been joined by Sumol + Compal in warning of significant prices increases in their soft drinks ranges due to the new ‘sugar tax.’
Parliament approved the Special Consumption Tax on November 25th for drinks with added sugar and other sweeteners as from February 2017. The tax will add between 8 cents and 16 cents per litre of sugary soft drinks.
In a statement, Sumol + Compal’s management predicts a fall in sales of its soft drinks range which accounts for 40% of its turnover in Portugal.
Due to the uncertainty generated by what the company refers to as a 'huge tax increase' on the soft drinks sector, the company is unable to maintain its original medium-term trading and profit forecast as outlined in its 2015 economic report.
Sumol + Compal said its increased turnover and higher operating result for this year can not be repeated in 2017 despite a general increase in private consumption and the recovery of exports to Angola.
The Iberian division of Coca-Cola European has suspended a planned €40 million investment in its Setúbal plant unless the government scraps the proposed ‘sugar tax’ on soft drinks. The government has commented that it is up to Coca Cola how it runs its operation and that the tax stays.
Comments
I'm sure the revenue won't move too far; most likely confectioneries and chip sales will increase a little.