SAN MIGUEL Food and Beverage, Inc. (SMFB) is bullish on growth for the next few years, on back of the steady expansion of its food, beer, and spirits segments.
“SMFB will continue to grow. Wala kaming bad news na cyclical na biglang masama ang takbo. We are immune to economic shocks, or economic downturn,” SMFB President and Chief Executive Officer Ramon S. Ang told reporters after the company’s annual shareholders’ meeting on Wednesday.
The company is banking on the growing consumption of its beer, food, and liquor brands.
“We are investing in new strategically-located facilities to address robust demand. This also allows us to deliver our products to our consumers fresh and a lower cost,” SMFB said in a letter to shareholders.
For its food business, the company will be building new facilities for poultry and fresh meats processing, feed mills, flour milling. It is hiking the capacity for its prepared and packaged food segment for value-added meats, dairy, spreads, and biscuits.
Mr. Ang said the feed mills alone will have a capacity of one million tons each.
“For our beer business, we completed an additional bottling line in Sta. Rosa, Laguna in 2018 and with the brewing facilities already started in 2019, this will be a full-fledged brewery by 2020. We are also building a new brewery in Tagoloan, Misamis Oriental,” SMFB said.
Meanwhile, Mr. Ang said it will cooperate with the government on the proposed additional taxes on alcoholic products.
“We are going to cooperate with government in sin taxes, basta reasonable, basta kaya ng consumer (as long as it’s reasonable, as long as the consumer can take it),” he said.
He added that they will have to pass on the price increases to customers.
The Department of Finance earlier proposed a P40-per liter tax rate for fermented liquor, which is also reflected in Senate Bill No. 2197. Distilled spirits may face a 22% ad valorem tax on the net retail price as per House Bill No. 8618, which was approved on third reading last December.
On top of that, the House of Representatives moved to add a specific tax per proof liter of P30, while the Senate version provides for a specific tax rate of P40 per proof liter.
Mr. Ang noted that the increase should be similar to how additional taxes have been imposed on cigarette products.
The 17th Congress approved on Tuesday the proposal to increase excise tax rates for tobacco products, which sought to increase the excise tax on tobacco products to P45 in 2020 and by P5 every year until it reaches P60 per pack in 2023. It will then increase by five percent every year thereafter.
SMFB’s net income attributable to the parent dropped 13% to P3.8 billion in the first quarter of 2019, compared to the P4.35 billion it posted in the same period a year ago. This came amid a 14% increase in gross revenues to P75.66 billion. — Arra B. Francia