Soft-drink companies launch lobby machines

Soft-drink companies have been putting the pressure on the Regional, Development and Competitiveness Ministry in a bid to stop the planned introduction of a tax on fizzy drinks, fruit juice and bottled water, as dictated by the EU-IMF memorandum.

The ministry appears to be siding with the bottlers, according to a senior ministry source, who said that talks have been launched with the Finance Ministry over the issue.

The memorandum, which Greece signed with the EU and IMF last year in order to obtain a 110 bilion euro rescue loan, states that a tax on non-alcoholic drinks will be introduced as of 2012 in a bid to raise 300 million euros in revenues.

The levy, according to the memorandum, needs to be included in the 2012 draft budget to be prepared by September.

Greece?s non-alcoholic drinks market is estimated to be worth one billion euros, including sales at supermarkets, corner stores and restaurants. The sector is dominated by large multi-nationals, such as Coca Cola Hellenic Bottling, Pepsico-Ivi, Vivartia, FAGE and Nestle.

?We are called on a very regular basis by large companies and smaller ones,? said the ministry source.

Beverage suppliers are concerned about the impact the tax – which could reach 30 percent – will have on sliding revenues.

?We understand that the Finance Ministry wants to increase income but a reduction in consumption due to an additional tax burden will not result in the targetted revenue growth,? according to an official from a drinks company.

Doubling the price of soft-drinks is estimated to result in a 15 percent drop in demand, according to industry figures, as bottlers warn about the impact this may have on their operations.

Neither the Development Ministry, nor the companies have put together an alternative proposal to the planned tax for the Finance Ministry.

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