Coke confirms nixing premix importation

COCA-COLA confirmed that it has already cancelled contracts for premix importation for the third and fourth quarter of this year, and that it is buying domestic sugar because of the very reasonable price now.

"Because of that cancellation, we even paid for penalties because it is logical now to buy domestic sugar. Ronnie Asuncion, Coca-Cola's procurement manager, also assured that no contract was signed to buy premix for 2012 because he believes that, in the coming milling season, it might be more logical for him to start negotiating for domestic sugar supply," said JB Baylon, public affairs and communication director of Coca-Cola.

Baylon has confirmed that this development was already announced during their meeting called by Sugar Regulatory Administrator Gina Martin with some sugar industry leaders at the Philippine Sugar Millers Association's office.

In attendance during the said meeting were Manuel Lamata of the Philippine Sugar Alliance, Enrique Rojas of the National Federation of Sugarcane Planters, and Raymond Montinola of the Confederation of Sugar Producers Association.

Baylon said that of the five million bags of sugar the company uses, three million was already bought by the company from the domestic market.

"We continue to buy not because of the boycott or that we are being pressured but because the price of sugar is now reasonable enough and that it is no longer logical for us to buy the imported sweeteners," he clarified.

"We also announced during the said meeting that we are ready to qualify sugar millers and planters in Negros to be certified suppliers of Coca-Cola because Coca-Cola global follows certain procedures and rules, especially on child labor," he added.

Baylon also said that Coca-Cola is now exploring contract farming with Filipino sugar farmers to make sure that it has sufficient supply from the domestic market and "we can help the farmers in the country so that, even if the price of sugar are high or low, they would maintain their income with us and we can also secure the domestic source of sugar."

"We are initially starting with 500 hectares in Negros, 300 hectares in Bukidnon and more of that so that we can get there our domestic supply of sugar," he added.

During the meeting, Baylon said it was realized that the issue on premix may not have come to the present situation if they started the dialogue earlier.

Some industry leaders, he said, informed them that if they were informed of the company's side before going into the premix importation, some compromise or special considerations should have been discussed and they would have come out with a beneficial solution.

"The sugar industry officials are correct in saying that the sugar industry and the industrial users should always hold dialogues if the price of domestic sugar is high for industrial users. The sugar industry leaders requested that, before importing premix, they should be informed that the price of their sugar is high and is already beyond the budget of the industrial users, so that they could come up with options to adjust or come out with a special provision or discount that would not hurt the sugar industry," he said.

He said it was already agreed that they will hold such negotiations in the future.

"If the partnership is firm, industrial users and the sugar industry have frank conversation. They should sit down and come up with a beneficial solution," he said.

Baylon also said that during the meeting, they did not discuss about the boycott.

"We don't have any demand to lift the boycott or anything. We went there to listen to the concerns and we went there to express our side," he added.

About the congressional hearing, Baylon said: "I think the congressional hearing will be held to clarify issues on the provisions of the Tariff Code. If it is necessary to refine the provisions of the tariff codes, that's already up to Congress. I welcome the opportunity to appear before a congressional body because this is a national policy and that 2015 is coming and if the government and the private sector, especially the sugar industry leaders would not unite, we are facing a big problem. We should focus our attention on the coming problem." (TED)

Published in the Sun.Star Bacolod newspaper on July 10, 2011.