Specials

Shocked by the retrograde budget proposal, says Indian Beverage Association

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/smartcrop_800x800/public/images/event-coverage/2014/07/10/drinks_budget.jpg?itok=eCmYgZun

MUMBAI: Taking a cue from Health Minister Dr Harsh Vardhan, who has been pushing for higher tax on tobacco products, the Finance Minister Arun Jaitley took a step further from not only increasing excise duty on tobacco, but targeted the aerated drinks as well.

With an eye oncreating a healthier India, the FM has taxed aerated drinks containing sugar, while exempting fruit juices and other aerated drinks like soda.

"I also propose to levy an additional excise duty at 5 per cent on aerated waters containing added sugar. These are healthy measures and I hope everyone would welcome them from the point of view of human and fiscal health," Jaitley said in his speech.

However, the move hasn’t gone down well with the industry.

On the hike,  an Indian Beverage Association (IBA) spokesperson says, “We are extremely shocked by the retrograde budget proposal of a 5 per cent hike in excise duty on aerated drinks with added sugar.”

The players point out that the soft drinks industry is already one of the highest taxed categories in the country. The combined impact of CENVAT and state VAT rates reaches 34 per cent in eight states in the country. “Coming on top of the current 12 per cent rate, the additional 5 per cent duty increase will be tantamount to a 40 per cent increase in the central excise duty which would hit the industry hard and cause a major slowdown at a time when demand growth for the industry has been sluggish,” elaborates the spokesperson.  

The IBA rebuts the increase by saying that the carbonated soft drinks (CSD)  industry is a key segment of the food processing sector in India. It is a significant user of agri products and, with its high labour intensity, contributes significantly to agricultural growth and employment. With a ratio of direct to indirect employment of 1:4, similar to that of the software industry, the industry’s developmental impact is not adequately appreciated. Currently, it employs over 300,000 people, and if there is a conducive environment for growth the industry has the potential to grow at double digit rates and can contribute more than a million additional jobs over the next decade.  

“It must also be understood that in a country where options of safe, convenient and hygienic beverages are rather limited, CSDs play a very important role in meeting the hydration needs of people. With this hike in excise duty, the industry will have no option but to increase the price of its products. An increase in price will also fuel the growth of beverage options from the spurious and unorganised sector which, on the one hand, pose significant risk to public health and on the other, will take away tax revenue from the government,” adds the spokesperson.

Parle Agro CMO and JMD Nadia Chauhan says, “In the wake of current hike, we will be evaluating our cost efficiencies for Cafe Cuba, whilst closely observing the change in dynamics of the CSD market. Our immediate focus is to work out a strategic approach that works best in serving consumer interest as well as maintaining the organisation’s operational cost. Whether we will be adjusting our price points, reworking volumes or fine-tuning marketing expenses is a key decision that will be taken basis analysis of all the key factors that determine our pricing strategy.”

As per a report by Euromonitor International, soft drinks off-trade value sales continued to record further growth in 2013 in India. The year also recorded many new launches in flavours across categories including juices, powder concentrates, and carbonates. Leading companies such as Coca-Cola India and PepsiCo India introduced various new flavours across the year. Smaller domestic companies including Hector Beverages and Pioma Industries also followed the suit.

The IBA has urged the government to reverse this hike as it will retard the progress of an industry which can have a significant positive impact on India’s development, particularly in the changed governance scenario in the country.

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/25/miptv%20%281%29.jpg?itok=wl-E69cK
MIPTV: Digital fronts to showcase latest programming alongside content creation brands

MIPTV 2017 will put a special emphasis on the new generation of digital content studios aiming at engaging with audiences as part of the Digital Fronts showcase.

Specials Event Coverage Miptv
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/23/Shridhar%20Subramaniam%20and%20Thomas%20L%20Vajda.jpg?itok=c1HuYYXL
FICCI FRAMES: Legitimate screens, stricter laws, best practices for IPR

MUMBAI: A National Intellectual Property Rights policy is a healthy prescription for the creative industry that seeks to provide an enabling framework for monetisation, protection and enforcement of copyright, but this can only succeed if there is robust law enforcement in addition to more punitive...

Specials Event Coverage Ficci Frames
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/23/FICCI_Frames_2017%20%281%29.jpg?itok=bavvvr9c
FICCI Frames 2017: Birth of other mediums cannot kill traditional TV

MUMBAI: The fast changing scenario and the content ecosystem have gone through a significant change over the years and are keeping all the production houses and the broadcasters on their toes. The 'Grammar of the new TV content' on the second day of FICCI FRAMES 2017 was discussed as experts from...

Specials Event Coverage Ficci Frames
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/23/Aranb-goswami-ficci-800x800.jpg?itok=-EJIhzkv
Arnab Goswami: Best time to enter news market when there's no leader

MUMBAI: Whether off screen or on screen Arnab Goswami is a passionate and animated speaker, though some would say he’s given to histrionics. "The best time to enter the (news) market is when there is no leader," Goswami said with his trademark flourish, barely few months after leaving Times TV...

Specials Event Coverage Ficci Frames
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/22/raj%20%281%29.jpg?itok=-NRkQv4f
'Make piracy an economic offence, good cos 'badvertise' too'

Protection and enforcement of copyright continues to remain a challenge for the Media and Entertainment industry. According to estimates, rogue or pirate sites earned 35 per cent more revenues than the Indian Film Industry in 2016.

Specials Event Coverage Ficci Frames
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/23/Brijesh-Singh.jpg?itok=xj2jjHJI
FICCI Frames ’17: Maharashtra to form IP crime unit to fight online piracy

MUMBAI: Well, well. The Indian media industry and the government are finally getting serious about content piracy. After Telangana Intellectual Property Crime Unit (TIPCU), Copyright Force and the government-mandated Copyright Board, Maharashtra state is all set to get Maharashtra Intellectual...

Specials Event Coverage Ficci Frames
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/22/FICCI_Frames_2017%20%281%29.jpg?itok=n-qaHXPv
FICCI-KPMG report: Rural India fuels digital consumption; FTA channels gain prominence

MUMBAI: The ‘Bharat’ story strengthened with expansion of rural measurement in TV and 4G data price wars deepened digital consumption, which were spurred further by mobile Internet and smartphone penetration. While print and films segments were supported by growing demand from the regional markets...

Specials Event Coverage Ficci Frames
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/22/FICCI_Frames_2017.jpg?itok=mUqT5idy
FICCI Frames 2017: Stakeholders feel regulations cripple monetization

MUMBAI: In keeping with the tone set in the morning about the changing scenario as far the political climate and censorship were concerned, every participant was keen to hear what the Government had to say about this on day one of the FICCI FRAMES meet here.

Specials Event Coverage Ficci Frames
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/03/21/FICCI_Frames_2017%20%281%29.jpg?itok=bnqpprsI
FICCI-KPMG report projects TV sector to reach Rs 1166 bn by 2021

The year 2016 was a mixed bag for the Media and Entertainment (M&E) industry. The sector is projected to grow at a faster pace of 14 per cent over the period 2016–21 with advertising revenue expected to increase at a CAGR of 15.3 per cent, according to a report released today.

Specials Event Coverage Ficci Frames

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories