Coca-Cola will do its 'best' not to cut jobs, raise prices amid sugar shortage - official

Coca-Cola Beverages Philippines Inc. has pledged to do its "best" not to lay off a single employee and raise the prices of its products despite the operational difficulties brought on by a lack of bottler-grade premium refined sugar.

“We’re no longer running 30-40% of our lines so we do have to slow down already,” Coca-Cola Beverages Philippines Corporate and Regulatory Affairs director Juan Lorenzo Tañada said in a Zoom interview with GMA News Online on Monday.

Coca-Cola Philippines, along with Pepsi-Cola Products Philippines Inc. and ARC Refreshments Corp., had said that the bottling industry was experiencing a shortage of premium refined sugar—a key ingredient in making its products.

Tañada said Coca-Cola Philippines reduced production as a result of the shortage, which affected the company’s distribution numbers.

The Philippine Association of Stores and Carinderia Owners (PASCO) earlier said that the insufficient deliveries of soft drinks had negatively affected their sales.

PASCO said store and carinderia owners have observed insufficient deliveries of soft drinks and other beverages.

Despite the reduced output, Tañada stated that the company would not lay off any employees.

“Throughout COVID, we did not let go a single person as a result of the pandemic. We really fought hard to not let go of anyone and we are still gonna do our best to not have to do that as well. That’s what we're probably going to do, even as we slow down our operations,” he said.

Coca-Cola Philippines recently suspended operations of its plant in Naga City, Camarines Sur due to a lack of supply of bottler-grade sugar.

“We apologize to our customers and consumers for this, but rest assured that we are working very hard, not only on our own but as a food and beverage industry. We are working with our legislators and authorities as well to normalize the situation,” Tañada said.

Tañada said Coca-Cola would not resort to using high-fructose corn syrup, which has a higher excise tax of P12 per liter than purely caloric sweeteners such as sugar, which carries an excise tax of P6 per liter.

“We try our best not to raise prices of our products,” he said.

Over the weekend, Coca-Cola Philippines said the industry would need 450,000 metric tons of premium refined sugar for manufacturers to utilize 100% of its manufacturing capacity for the balance of the year and serve the orders of customers who are depending on their products for their sales and income.

Tañada said the company expressed optimism that the government will heed the call of the bottling industry.

“I believe that Malacañang is strongly considering it as soon as possible. We are really hopeful because it seems to us that Malacañang is very receptive to our ideas and they are really sympathetic to what we are mentioning as our current situation,” he said.

In a separate statement, Sugar Regulatory Administration Acting Administrator David Alba said, “We acknowledge that there is a shortage as far as refined sugar being used primarily by the beverage industry.”

“We are currently consolidating the data as to how much is really needed so we can recommend the necessary actions we need to take to the President,” Alba said.

“However, while we know that Coca-Cola is in a critical place in their sugar needs, we would like to emphasize that Pepsi and RC Cola still have their available supply as per our records,” the SRA chief said.

Press Secretary Trixie Cruz-Angeles earlier confirmed that the proposed amount of sugar that will be imported is 150,000 metric tons.

Sugar is in the spotlight following the controversial issuance of Sugar Order No. 4 (SO4) authorizing the importation of 300,000 metric tons of sugar, which was later deemed “illegal” as it was signed without the knowledge and expressed approval of President Ferdinand Marcos Jr., who as the concurrent Secretary of the Department of Agriculture (DA) also sits as the chairman of the Sugar Board.

Signatories of the controversial order, including Agriculture Undersecretary Leocadio Sebastian, board member Atty. Roland Beltran, and Sugar Regulatory Administration administrator Hermenegildo Serafica, have since resigned from their posts. 

Marcos earlier rejected the proposal to import 300,000 metric tons of sugar despite the increasing prices of the basic commodity due to supply constraints. 

The DA earlier said there is a shortage of about 300,000 metric tons of sugar as local production was affected by the onslaught of Typhoon Odette late last year. —VBL, GMA News