Dubai Pepsi bottler loses fizz ahead of sugar ‘sin tax’

Dubai Refreshment, the company that bottles Pepsi in Dubai, reported a fall in second-quarter sales. (Reuters)
Updated 14 August 2017
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Dubai Pepsi bottler loses fizz ahead of sugar ‘sin tax’

LONDON: The Dubai-based Pepsi bottler lost some of its fizz in the second quarter as sales retreated.
Dubai Refreshment, which bottles Pepsi and other sodas such as Mountain Dew and 7Up, reported a 12 percent fall in second-quarter profit to 24.7 million dirhams ($6.7 million) as sales also declined by about 1 percent to 229.3 million dirhams.
Soft-drink sales have boomed across the Gulf helped by the region’s youthful population, but the rollback of government subsidies and moves to encourage healthier diets, while reducing levels of obesity, have put soda-makers in the crosshairs of regulation.
Pepsi last month reported a second-quarter profit that topped analyst estimates as sales ticked up by about 2 percent.
But the company flagged up higher raw material costs driven by the strong US dollar and operating cost inflation in some Middle East, North African and Asian markets.
“Consumption of sugary soft drinks is high in the region, and will in all likelihood continue to grow for the foreseeable future,” said Euromonitor International analyst Matthew Berry in a January 2017 report. “However obesity in the Gulf is a ticking time bomb and governments are starting to move to avert the looming public health crisis.
“This could potentially make these countries some of the most promising markets for health-positioned drinks in the world, but it will also pose a threat to sugar-heavy categories that have found the Gulf states to be a rare bright spot at a time of anti-sugar feeling.”
The cost of fizzy drinks in the Gulf have been among the lowest in the world historically, but consumers will soon have to get used to paying more with the introduction of both sugar taxes and value-added tax (VAT).
The UAE Federal Tax Authority said in May that energy drinks would be hit with a 100 percent tax in the last quarter of the year while sugary fizzy drinks would also be targeted with a 50 percent tax. That move follows the decision by Saudi Arabia to impose a special tax on sugary drinks, as well as on cigarettes, starting last June.


US energy secretary meets Saudi counterpart after OPEC cuts

Updated 10 December 2018
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US energy secretary meets Saudi counterpart after OPEC cuts

RIYADH: Saudi Arabia’s energy minister held talks Monday with US Energy Secretary Rick Perry, after the Kingdom and its allies defied US pressure to cut oil production in a bid to prop up prices.
They discussed the “state of the oil market” and energy cooperation between the two countries during a meeting in eastern Dhahran city, the minister, Khalid Al-Falih, said on Twitter.
Perry tweeted that he discussed the need for “open, free, and fair markets with the Saudis.”
OPEC members and 10 other oil producing nations, including Russia, on Friday agreed to cut output by 1.2 million barrels a day from January in a bid to reverse recent falls in prices.
The decision came even as US President Donald Trump demanded that the cartel boost output in order to push prices down.
But Al-Falih shrugged off the pressure last week, saying “we don’t need permission from anyone to cut” production.
The US “is not in a position to tell us what to do,” he told reporters ahead of Friday’s OPEC meeting in Vienna.
Last week, for the first time in decades, the United States — which is not a member of OPEC — was a net exporter of crude oil and petroleum products.
It was the latest sign of how the shale boom has lifted the US standing on global petroleum markets, prompting talk of “energy dominance” by Trump.
Perry’s visit to Dhahran came as Crown Prince Mohammed bin Salman unveiled state oil giant Aramco’s plan for a new energy megaproject in the area known as the King Salman Energy Park (SPARK).
The energy park is expected to attract an initial investment of $1.6 billion, Aramco said.