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NEWS UPDATES 23 October 2009

Philippine liquor firms to address WTO alcohol tax case    

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Philippine liquor companies have formed a group to better address issues confronting their industry and allied sectors, starting with the question on liquor tax rates that could be submitted to the World Trade Organization (WTO) for adjudication, reported local daily Business World.

The Distilled Spirits Association of the Philippines, Inc., which was incorporated last October 12, has engaged the services of the Sycip Salazar Hernandez Gatmaitan law office and a foreign law firm to assist in representing the Philippine government, should the European Union (EU) proceed with its case before the WTO, Oliva Limpe-Aw, president of Destileria Limtuaco Inc, was quoted as saying.

"We are likewise supplying data and other relevant information that could help government in its defense," said Ms. Limpe-Aw, who is also the association’s first president.

Last week, the EU and the Philippines failed to reach a compromise on Republic Act 9334, which increased excise tax rates by half for imported liquor, compared to only a 30 percent hike for locally made spirits. The US also joined the talks last week. The EU had said it is no longer interested in further talks.

"We will and are prepared to defend our position in the WTO," said Ms. Limpe-Aw. "It is difficult to do our industry advocacy independently. The EU complaint...has brought the industry together."

Limpe-Aw explained that the newly formed group will eventually include allied industries, noting, for instance, that the dispute with the EU also affects the country’s sugar industry.

"Since the distilled spirits industry uses approximately 95 percent of molasses production in the Philippines, the sugar industry will be severely affected by this case if we do not defend our position well," she said.

Besides her firm, Limpe-Aw said the group now counts as members San Miguel Corp., Ginebra San Miguel Inc., Tanduay Distillers Inc., Emperador Distillers, Alcohol Distilleries-Absolute Chemicals Inc., Consolidated Distillery Inc., Far East Alcohol Inc., Central Azucarera de Tarlac and Berbacs Chemicals, adding she expects the Confederation of Sugar Planters to join.


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