Pepsi PHL seeks permission to sell HFCS inventory to AAC

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A woman passes by a Pepsi booth at the Food Expo at the World Trade Center, Pasay, Philippines, taken on September 9, 2013.

BEVERAGE manufacturers Asian Alcohol Corp. (AAC) and Pepsi-Cola Products Philippines, Inc. (PCPPI) have asked the Sugar Regulatory Administration to authorize AAC the use of PCPPI’s remaining high fructose corn syrup (HFCS) inventory.

In a letter dated April 4, AAC requested to purchase PCPPI’s 418 containers of high fructose corn syrup which it intends to use for its own production.

The 418 container loads amount to 9,196 metric tons of HFCS.

AAC said that the HFCS will serve as an additive to molasses which is needed for the production of potable grade alcohol.

“The distillery sector […] is in constant search for materials that could make its production cost-efficient to remain economically competitive amidst the issues of increasing prices of molasses and stresses in its supply,” the parties said in a letter.

TAAC clarified that the use of HFCS will not be used as a replacement for sugar and molasses, but will only be used to spur the production of yeast in the fermentation process to produce ethanol.

In a letter dated April 5, PCPPI said that while it will abide by SRA’s memorandum issued on the disposal of its HFCS stock, it wants to take AAC’s offer in consideration.

“In this connection, we humbly request for reconsideration and instead of destroying these stocks, we may be allowed to dispose these in favor of AAC,” PCPPI said.

“[AAC] intends to apply the total volume of the subject HFCS as an additive to molasses, hence, as an aid to the fermentation of its potable-grade alcohol products.”

Late last month, the SRA allowed PCPPI to reclassify its remaining HFCS stocks from Class D or for export to Class B or for public consumption, but also ruled the stocks must be disposed of without the company profiting from it.

PCPPI chose not to use HFCS after the first package of the tax reform law took effect, which imposed a P12 per liter tax for beverages using HFCS. PCPPI then decided to shift to cane sugar, which in beverages is taxed at P6 per liter.

The SRA will rule on the matter after its board meeting on April 12. — Anna Gabriela A. Mogato