China Cut Import Tax on Beverage and Food

On May 31, the Customs Tariff Commission of China issued an announcement on reducing the import tariff of daily consumer goods. According to this announcement, starting from July 1, 2018, the MFN tariff rate for some imported consumer goods will be reduced, involving 1,449 tax items.

A large number of imported beverages will be subject to tariff reductions from July. For example, mineral water, soft drinks, natural water, fruit juices and non-alcoholic beer and etc. The adjusted MFN tariff rate for these commodities will fall to 5%-12%. It was 35%-10% previously.

The announcement revealed that mineral water, soft drinks, packaged and unpackaged natural water, other water, ice and snow, flavored, sugared or other sweetened water, non-alcoholic beer, and other non-alcoholic beverages are all included in the adjustment of the MFN tariff rate for consumer goods. It can thus be seen that the scope of the subject goods is very extensive. According to the common classification in the market, these imported beverages cover mineral water, carbonated drinks and instant coffee. They also include sparkling water. soda, fruity water, non-alcoholic beer, tea beverage, fruit juice, vegetable juice and so on. In other words, the drinks that we are likely to consume in daily life are all on the list.

Quick Links with More Info:

• Imported Consumer Goods MFN Tariff Rate Adjustment Table
• MFN Provisional Rate Adjustment for Imported Goods

This announcement may have great influence on the beverage industry, including manufacturers, sellers, even some other related industries such as suppliers of commercial refrigerators, packaging, bottles and etc. And the prices of these imported beverages, of course, is most concerned about by everyone.

For the policy just announced, a group of foreign brands said that the impact is still being assessed. But they generally welcome this decision. So, by the reduction of import tariff, which companies have the opportunity to become a “big winner”?

When responding to the Finance Reporter of China.com, the Swiss food giant Nestlé, which owns mineral water brands such as Perrier, stated: “We welcome this policy, which will benefit the development of the industry as well as the consumers. This is a new policy and we need internal discussions to make new decisions.”

The French food giant Danone Group stated to the media: “The impact of this tariff cut on Evian’s business and related products are still under evaluation.”

The Finance reporter of China.com contacted Coca-Cola. The staff said: “Coca-Cola China has been working with bottling partners to produce, sell and distribute our products in China to help the local economy. In China, 98% of raw materials are local. ” They also said: “The pricing strategy was formulated after comprehensive assessments, considerations of various local operating costs and market dynamics. We don’t just determine this by a single factor.”