ISLAMABAD-The fruit juice industry alliance is strongly opposed to the draconian imposition of 20% federal excise duties on packaged juices and decries being clubbed with the carbonated beverages in the new taxation measures undertaken by the federal government on the final day of the fiscal budget 2023-24.
The 20% hike in FED from the already existing 10%, and the additional 18% GST, will not only derail the sector completely but also have devastating impact on the rural economy, affecting fruit growers and allied industry associated with the juices sector, eventually resulting in decline in governments overall tax revenue as well. Earlier due to the 10% FED levy, industry sales plummeted to PKR 43 billion in 2023 that were to increase to more than PKR 70 billion, considering the industry growth rate. “Putting the juice sector in the same league as carbonated drinks is absolutely undermining the vital role it’s been playing as a safe and healthy alternative to carbonated drinks,” spokesperson of the juice industry alliance said. “It is also important to question who is behind this move, and why these measures are being bulldozed without taking into account the impact it will have on the agriculture sector. Is it any of the UN bodies such as UNICEF or WHO, or the IMF alone.”
Despite assurances of no further increase in FED from the government and representatives of the FBR and finance ministry, the government has proceeded with sheer indifference. The industry has also been helping thousands of farmers adopt best practices, which has resulted in the farmers’ uplift and development. The industry procured an estimated 100,000 tons of mango from local farmers, apart from other fruits, for conversion into pulp. These measures will result in drastic reduction in fruit pulp purchase by almost 50% and even more following these measures. Industry reports show that fruits have a high rate of wastage, because of their intrinsic perishability and improper handling, storage, packaging and transportation. This causes farmers to sell their produce at very low prices, especially during peak season. The formal packaged juice industry, by procuring fruits timely prevents significant food wastage and protects farmers’ livelihoods.
The fruit-based beverage industry has a turnover of about PKR 60 billion, with an investment of PKR 40 billion, and employs 5,000+ employees. Fruit juices and drinks are popular amongst the youth and are optimized to suit their healthy lifestyle. According to regulations, such as Punjab Food Authority, fruit drinks have minimum 8% fruit content, nectars have 25-50% fruit content and pure juices have 100% fruit content. In fact, fruit juices are promoted as healthier options by food authorities across the country for consumption in schools and colleges.