Jakarta. An industry association said Wednesday that a looming sugary beverage excise would likely cause prices of the drinks to go up, while also arguing that the producers should not be the only one who takes the blame for obesity cases in the country.

The government is mulling imposing an excise tax on sweetened beverages in a move to cut down obesity and diabetes cases. However, according to the Soft Drinks Industry Association (Asrim), the tax will take a toll on the industry.

“If the excise is in force, this will create an additional burden on the industry, and we will have no choice but to increase the price [of the drinks]. This will certainly affect the affordability of our products. If consumers cannot buy our products, it will affect the industry's growth,” Asrim chairman Triyono Prijosoesilo told a press briefing in Jakarta. 

According to Triyono, the government should not only blame sugary drink producers for the high-calorie intake that can eventually lead to obesity and diabetes. He also claimed that Indonesians mostly consume unprocessed food and beverages.

“If [the government] launches the tax to address health issues, the beverage industry is not the main contributor in terms of calories,” he said.

A recent research by the think tank Center for Indonesia’s Strategic Development Initiatives (Cisdi) shows that a 20-percent increase in sweetened beverages has the potential to slash the consumption of such drinks and sugar intake by 5.4 grams for men and 4.09 grams for women. The reduced consumption is expected to prevent 253,527 overweight cases, and 502,576 obesity cases until 2033. Indonesia can also save up to Rp 40.6 trillion (about $2.6 billion) with an excise in place. The savings come from eliminating the need for diabetes treatment and also preventing the economic losses from the disease-induced lost productivity.

The government has been discussing the possibility of implementing the sugary drink excise since 2016, but the policy kept on getting postponed. However, the Finance Ministry not long ago gave the latest updates on this excise.

“Health Minister [Budi Gunadi Sadikin] wants to have this excise implemented in 2024. We have coordinated with other ministries and bodies for its implementation and policy review. After that, the government will announce the policy when the time comes. We will also discuss this with the House of Representatives,” Askolani, the director-general for customs at the Finance Ministry, told the press late last month.

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