The share price of Sappe Public Company Limited (SET: SAPPE) fell 8% in the morning session after the report of the Philippines’ government is expecting to increase tax on junk food and sweetened beverages.
Under the proposed tax measure, the Finance Ministry said the Department of Finance plans to impose a PHP10 per 100 grams or PHP10 per 100 milliliters tax on pre-packaged foods lacking nutritional value.
The plan had a negative impact on SAPPE as the company had 25% of its total revenue from shipment to Indonesia and the Philippines. The two countries are also in SAPPE’s top three destinations for exports as well.
Finansia Syrus Securities (FSS) estimated the revenue contribution from the Philippines to be around 15% of SAPPE’s total revenue.
The trend of collecting more tax on sweetened beverages is seen in many Asian countries. FSS expected SAPPE to make adjustments to its recipe to support a healthy trend, while R&D is also SAPPE’s strong suit.
As of 12:00 BKK time on Friday, the share price of SAPPE dropped THB5.00 or 5.93% to THB79.25 per share.