HFCS case closed: Piñol
Coca-Cola FEMSA Philippines, Inc. will drop its court case questioning the validity of Sugar Order No. 3 and will increase by at least 10 percentage points its current usage of local sugar.
Coca-Cola will also reconvert its processing systems to accommodate more local sugar.
The development came after a closed-door meeting among stakeholders in the sugar industry, officials of the Sugar Regulatory Administration (SRA) and officials of beverage companies.
Agriculture Secretary Emmanuel Piñol said Coca-Cola will write SRA, through Administrator Anna Rosario Paner, for a clarification of Sugar Order No. 3 to verify that the SRA directive did not cover the importation of High Fructose Corn Syrup (HFCS) by beverage companies before the SRA order took effect on March 10.
Piñol said the clarification will allow Coca-cola to finally secure the release of some 300 container vans of imported HFCS stored in customs zones.
Sugar Order No. 3 may classify HFCS as a “Class C” or reserve sugar, “B” sugar (domestic) or “D” sugar (world market) which meant corn sugar could only be used by beverage and food manufacturing companies after SRA classifies the same as “B.” It also imposes a fee of P30 per metric ton of HFCS.
The Sugar Board, which governs the SRA, issued Sugar Order No. 3 in response to complaints from local sugar producers that the higher consumption by beverage companies of HFCS, which are imported mostly from China with zero tariff, caused a huge drop in domestic sugar prices by as much as P400 per 50-kilo bag to P1,300-P1,350 per bag.
The beverage companies said they switched to using HFCS to offset the huge price difference of P200 per 50-kilo bag between HFCS and domestic sugar.
Piñol said in the meeting, Coca-Cola, Pepsi-Cola and the other beverage companies also committed to buy this year the sugar they plan to buy in 2018 from domestic sugar producers to help stabilize domestic sugar prices.
He said Coca-Cola and the other beverage firms committed to use more domestic sugar if they will be allowed access to the “D” class sugar, which is sugar reserved for the world market.
He said access to Class “D” sugar still has to be studied by the SRA.