VIETNAM: Soda tax proposals "discriminatory" - US trade group
A proposed “bubble tax” on carbonated sodas in Vietnam is unfair as it will fall “almost exclusively” on US soft drink brands, a US trade body has argued.
The 10% excise tax, under discussion by the Vietnamese Government, will give non-carbonated bottled drinks a price advantage, the American Chamber of Commerce Vietnam told just-drinks. US firms account for 90% of Vietnam's carbonated drinks market, while Vietnamese brands dominate non-carbonated bottled drinks, according to the chamber.
“Since nearly all carbonated soft drinks sold in Vietnam are US brands, the tax will fall almost exclusively on American brands,” the chamber said in a statement. “While the tax is not, on its face, discriminatory, it clearly discriminates against American brands in practice.”
About 70% of non-alcoholic beverage sales in Vietnam are non-carbonated, according to chamber research.
Meanwhile, the head of the American Chamber of Commerce Vietnam told just-drinks the body is in talks to stop the legislation.
Herb Cochran described government officials as being “very co-operative in the discussions to clarify various issues”.
The tax was first proposed last year as a health measure. Officials claim carbonated beverages contain a level of acidity 100,000 times higher than normal water, which can lead to obesity and stomach ulcers.
International soft drinks makers have increased their presence in Vietnam over the past few years. In 2012, Coca-Cola announced it was to spend US$330m in Vietnam in the next three years, while PepsiCo operates a JV in the country with Suntory Holdings. PepsiCo says Vietnam is a “high-priority market”.
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