MANILA - Coca Cola Bottler's Philippines Inc. is filing an appeal with the Central Valuation Review Committee of the Bureau of Customs on the ruling that CCBPI misclassified its imports as “premixes”, when what the company actually imported was refined sugar.

Cat Avelino, CCBPI corporate communications director, told the DAILY STAR "We are disappointed with the VCRC's ruling on premix importations. We believe any pre-mix importation is in full compliance with the provisions of the Tariff Code as well as all the international trade agreements entered into by the Philippine government."

Under the ASEAN Free Trade Agreement, all companies, including Coca-Cola, are able to competitively source raw materials, she said, "which ultimately benefits the consumers as product prices remain reasonable and competitive. We will be forwarding our appeal to the Central Valuation Review Committee."

She said Coca-Cola has been operating in the Philippines for 100 years – refreshing Filipinos and supporting local industry. "We continue to see huge potential growth in the Philippines, which is why Coca-Cola committed to invest US$1 billion in the country over the next five years," she added.

The sugar industry last year protested Coke's importation of what they said was sugar in the guise of premixes to avoid paying a 38 percent tariff required on sugar imports. The industry also alleged that the huge import of sugar premixes caused a drop in domestic sugar prices.

“Premixes” carry a zero duty while refined sugar should be slapped a 38 percent tariff, Lucio Barcelona, director of the Confederation of Sugarcane Producers Associations Negros Panay chapter, said Monday night.

Barcelona, who secured a copy of the VCRC resolution from the Bureau of Customs Monday, said the VCRC ruled that CCBPI's imports of “premixes” C-100, E-61 and C-200, even though a mixture consisting of refined sugar and citric acid, should be classified as if they consisted of the material or component which gives them their essential character which is that of refined sugar.

The VCRC also stated that these “premixes” are raw materials in the production of beverages and the added ingredients did not sufficiently alter the essential character of the sugar, he said.

In short, the mixture did not attain the purpose or objective for which the mixture was made. Thus the VCRC found that the correct classification of CCBPI's imports should be under Asean Harmonized Tariff Nomenclature (AHTN) tariff heading 1701.99 or white refined sugar with a tariff of 38 percent, Barcelona said.

This Resolution is a result of the information supplied March 7, 2011 by several CONFED members to then Deputy Customs Commissioner Gregorio Chavez of the Assessment and Operations Coordinating Group and concurrent head of the Run After The Smugglers Program of the Bureau of Customs, he said.*CPG

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