Soda and beer price should rise with more tax, says Association

The price of soft drinks and beers should rise after coming into force, on 1 may, the law that increases taxes and change the recovery model of taxes of cold beverages (soft drinks, beer, energy drinks and isotonic). The change should generate an increase of 5% on average in the final price of the drinks to the consumer, according to Fernando Rodrigues de Barrios, President of Alfrebras (Association of Manufacturers of soft drinks from Brazil). It is estimated that, with the increase of taxes, the tax burden levied up sector 10%. "The price will suffer the impact of updating the basis of calculation, as used today is 2012," said neighborhoods. In the new model, the collection of PIS/Pasep is 2.32% and of Cofins, of 10.68%. The IPI (tax on industrialized products) shall be 6% for beers and 4% for the other drinks. The rates are fixed and will focus on the price of the product when leaving the factory. Thus, more expensive items will pay more tax. Today, the industry taxes are charged using a calculation that takes into account the volume, the packaging and the price of the product. Barrios believes that, in the long run, the change will be beneficial for the industry. "At first, the new model is painful for the Manager, but then it will be good because the tax rate equal to everyone will bring balance to the sector." Less bureaucracy the President of CervBrasil (Associação Brasileira da Indústria da Beer), Paolo Petroni, agrees the beneficial change. "It's a less bureaucratic model, which allows corporate planning because they will know in advance how much they pay in taxes," he said. About the transfer of the tax increase to consumers, Petroni prefers not to make predictions and says it will be possible to measure this impact until the end of the first half. "Each company will make decisions about price change within its strategy, since who increase the price will pay more tax," he said. The beer was a product whose price increased by 2014, according to the IPCA (national index of consumer prices), measured by the IBGE (Brazilian Institute of geography and statistics). While the accumulated inflation for the year was 6.4 percent, the price of the drink rose nearly 10%. The price of soft drinks and mineral water also increased greatly in the period, up 8.8 percent.