The juice industry coalition wrote to Prime Minister Muhammad Shehbaz Sharif and Finance Minister Mohammad Ishaq Dar to express concern that the FED may impede the sector’s growth, which has already experienced a decline in the previous several years.
According to industry estimates, Pakistan’s formal juices sector generates about Rs. 59 billion in annual income and Rs. 40 billion is thought to have been invested there.
Due to the fruit juices industry’s crucial role, Pakistan’s value chain for fruit-growing is improving. Overripe fruit is not wasted thanks to industry and farming community engagement.
Furthermore, a lot of fruit is wasted during the peak season as a result of inadequate storage facilities. The formal fruit industry offers assistance in resolving this issue. Additionally, it contributes to better processing and more effective fruit preservation techniques to reduce waste.
By collaborating with and acquiring crops that are readily accessible in excess, the industry helps the farmers. According to insiders, the sector’s fragmented structure, which sees a mushroom development of smaller, unregulated, and informal firms entering the market seasonally, is another major issue.
The FED raises the price of fruit juices for consumers, pushing them to choose items made by the informal economy, which does not pay taxes. This sector is growing like a mushroom and can provide products of low quality and little tax income.
Fruit drinks must have a minimum of 8% fruit content to comply with local requirements, whereas nectars must have a minimum of 25% fruit content and 100% fruit content for pure juices. Fruit juices are really marketed by food authorities all throughout the nation as healthier options for consumption in schools and universities.
Sales decreased between 2018 and 2019, when the government implemented FED, according to data provided by industry leaders. This ultimately led to a dramatic loss in sales tax revenue that could have been theoretically collected for the national exchequer.
The business did, however, pick up steam in the next year and the two years after the FED was waived.