Friday, March 24, 2017

Coca Cola Femsa Philippines willing to buy more local sugars to help sugar industry!

 Nothing beats level-headedness and diplomatic negotiations.

Coca Cola Femsa Philippines yesterday said the company is willing to buy more local sugar for its soft drinks production but asked for a 6-month period to be able to install new clarification equipment which would process raw sugar to syrup.

Lawyers Adel Tamano, a former congressman and vice president for corporate affairs, and Juan Lorenzo Tañada, legal and corporate director, representing Coca Cola Femsa Philippines paid a call on me yesterday to inform me the corporation has decided to spend "a few million dollars more" just to show to President Rody Duterte that it is willing to help the local sugar farmers.

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Tamano said the decision was reached in consultation with Coca Cola Femsa General Manager Diego Granizo following a series of back channel negotiations between the company and the Department of Agriculture and Fisheries Secretary who is also the Chairman of the Sugar Regulatory Administration (SRA) board.

He said Coca Cola Femsa Philippines will officially ask President Duterte through the SRA to give the company six months to be able to purchase the "clarification equipment" which is needed to process raw sugar into syrup.

"We will be spending a few million dollars more but we are willing to make the sacrifice just to show to the President that the company is willing to help the sugar industry and Philippine Agriculture," Tañada said.

During the meeting in my office yesterday, I informed Tamano and Tañada that three senior Cabinet members of President Duterte - Finance Secretary Carlos Dominguez, Trade Secretary Ramon Lopez and myself as Agriculture Secretary - have agreed to recommend to the President that Sugar Order No. 3 issued by the SRA should be held in abeyance to allow Coca Cola and other beverage companies to make adjustments in their processing equipment.

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Coca Cola, Pepsi Cola and other beverage companies have protested the immediate implementation of SO 3 which regulates and imposes stiff tariffs on imported High Fructose Corn Syrup used in the production of soft drinks and beverages.

The SRA order was issued in the face of plummeting prices of local sugar which dropped from P1,800 per 50-kilo bag to only P1,300 last week.

Sugar farmers blamed this on the increased use by the beverage companies of the lower-priced HFCS which is imported from China.

Coca Cola has filed a suit before a Quezon City board naming me and the members of the SRA board as respondents contending that HFCS is not covered by the SRA mandate since it is not cane sugar.

The company also maintained that the immediate implementation of the order will affect their operations.
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As of yesterday, Coca Cola reported that about 200 containers of HFCS are held in the different ports of the country and that it has slowed down its operations to ensure that the current HFCS inventory of the company will sustain their soft drinks production until the issue is resolved.

Big sugar planters last Monday staged a well-organised rally in front of the Coca Cola offices in Bacolod City where protesters carried placards accusing me of being anti-farmer, pro-Coke and insinuating that I was bribed by Coca Cola into recommending a stay on the implementation of SO 3.

Yesterday, Coca Cola executives offered to withdraw the case but I told them to await first the official Presidential action on their request for a six-month grace period before withdrawing the case.

The development yesterday proved me right in my contention that instead of forcing the issue on the regulated importation of HFCS, sugar industry stakeholders will benefit more if a dialogue is held between them and the beverage companies.

This would now mean that the beverage companies will slowly shift from the use of HFCS to local sugar, a move which would greatly benefit the sugar farmers of the country.

All's well that ends well and all that it takes is a high degree of maturity and cordial negotiations. SOURCE: MANNYPINOL

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