Infrastructure
News that the overnight
implementation of the
tax will be harmful to
their business.
“We are concerned
that
the
sudden
price increase will be
damaging, and that the
phased approach of
countries implementing
the tax at different
times may incentivise
smuggling,”
said
a
spokesperson
from
British
American
Tobacco.
The sales of cigars are
set to be impacted,
too.
Hans-Kristian
Hoejsgaard, CEO and
president of Oettinger
Davidoff AG, a cigar
maker, told Gulf News
that his company was
“obviously not a big fan
of the tax.”
As for energy drinks,
one
UAE-based
distributor handling the
energy drink Superman
described the tax as
expensive, saying that
it would impact sales,
and make the product
14
August 2017
more difficult to sell.
Aujan Coca-Cola, Dubai
Refreshments (Pepsi Co),
Al Fakher (the makers of
the UAE’s most popular
shisha tobacco), Red
Bull and a number of
other manufacturers and
distributors declined to
comment for this story.
Not all companies are
against the tax, however.
“It’s part of an international
trend that’s happening. It
makes sense,” said Tariq
Al Wahedi, acting chief
executive officer, Agthia, a
major food and beverage
conglomerate.
He added that producers
needed to take greater
responsibility.
“The price of a can of a soft
drink is just too cheap.
Given how heavily these
sugary drinks contribute
to obesity, it’s quite
sensible,” said Johannes
Holtzhausen, CEO of
Spinneys, a supermarket
chain.
Analysts say the tax
serves two purposes:
To raise money for the
federal budget, and to
combat diseases such
as obesity from sugary
drinks, and cancer from
smoking.
“The selective tax forms
an integral part of a
fiscal direction being
implemented in the
GCC, alongside VAT and
a possible corporate tax
in the future,” James
George, senior research
analyst at Euromonitor
International, said.
George added that the
excise tax on carbonated
drinks, energy drinks
and tobacco will have
the
added
benefit
of
countering
the
health risks caused by
unhealthy products.