The government's plan to impose excise on packaged sweetened drinks (MBDK) received a serious response from the General Chair of the Soft Drink Industry Association (Asrim), Triyono Prijosoesilo. According to him, the government must study where the public's sugar intake actually comes from. It is unfair to shift the 'blame' to MBDK producers so that they have to pay excise duty on sweetened drinks.
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The government has reasons for implementing the MBDK excise which will take effect in 2024. One reason is the increase in non-communicable diseases (NCDs) in recent decades. According to data from WHO (Noncommunicable disease country profiles 2018, Geneva, Switzerland, 2018) published on the page www.unicef.org, PTM accounts for 73% of the risk of death, a figure that cannot be taken lightly.
During the same period, there has also been a drastic increase in cases of obesity or being overweight, which is a major risk factor for NCDs, including diabetes, cardiovascular disease and stroke. The main trigger is a diet that involves excessive consumption of foods and drinks high in sugar, salt and unhealthy fats. The products are MBDK or sugar-sweetened beverages (SSBs), non-beverages; alcohol such as soft drinks, fruit/vegetable juices, energy and sports drinks, ready-to-drink tea and coffee, and flavored milk that contain high sugar levels (WHO, Taxes on sugary drinks: Why do it? Together Let’s Beat NCDs).
That is why the government is targeting MBDK by imposing excise taxes. The hope is that consumers will slowly get used to it so they can consume MBDK in a reasonable amount according to health standards. 'We know that the government's goal is to manage public health so that it can be better. "However, accusing MBDK of being the main cause of implementing excise needs to be studied more deeply," said Triyono Prijosoesilo.
He argued that the source of people's sugar intake is not only from drinks, but also from other sources. 'If the government only focuses on ready-to-drink drinks, its big goals will not be achieved. So if this is implemented, we as ready-to-drink beverage manufacturers will be affected. This means that, subject to the additional burden of paying excise, the selling price will increase. Because this is not a primary product, people will run away if prices rise. In principle, this policy is not appropriate. So we're not ready yet," explained Edy Suherli, Bambang Eros and Irfan Medianto from VOI who met him in the Pondok Indah area, South Jakarta recently. The following is the complete excerpt.
Currently, said Asrim Chairman, Triyono Prijosoesilo, the market for ready-to-drink products is very large, the local market is still not filled with domestic drink producers. (Photo: Bambang Eros, DI: Raga Granada VOI)
When was Asrim founded and what is its development like now?
Asrim was founded in 1977, founded by three owners of leading beverage companies in Indonesia, namely Coca-Cola, Aqua, and Teh Botol. The three of them united to form a soft drinks association and hope to become a reference for other ready-to-drink beverage entrepreneurs. After this association was formed, many entrepreneurs have joined Asrim to this day. This association continues to exist today.
After going through the past COVID-19 pandemic, how is the growth of the packaged beverage industry in Indonesia currently?
In 2023, the total growth will be approximately 3%. If we look further, this growth was contributed by Bottled Drinking Water (AMDK). However, other categories such as carbonated drinks, juice, tea, etc., growth is still negative. So if we subtract the growth of AMDK, the growth becomes -2.6%. In terms of industrial performance, it is still not stable, it has not returned to what it was before the COVID-19 pandemic. This is our homework in this organization and business actor.
For packaged beverage products, how much of what is produced is exported and how much is absorbed by the domestic market?
This typical packaged beverage product is not suitable for export. It is mostly used to meet the domestic market because it is liquid and heavy, so if it is forced to be exported, the price will not be competitive because the costs are already expensive.
It should be noted, Indonesia itself has a large territory with 270 million residents, this is a very large market. Even the domestic market cannot be fully fulfilled. Our target is that packaged beverage businesses can become hosts in their own country. The consumption level of Indonesian people is still below that of other countries, so the opportunity for growth is still very large.
The pandemic has disrupted many businesses, what about Asrim members, what are their tips for getting back up?
At the start of the pandemic in 2020, our sales dropped drastically. However, in 2021 and 2022, sales are starting to rise even though the pandemic is not over. However, the increase over the two years was not enough to cover the losses incurred in 2020. In total, growth only broke even, in other words, zero growth. In 2023, there will be growth of 3%, but this will only occur in one category, namely AMDK. From this data, it is clear that there are still challenges for us, and we must focus on developing our business in the future so that it can be even better.
What are the challenges faced by packaged beverage businesses?
The biggest challenge is that these packaged drinks are not a basic necessity, unlike basic necessities which are always needed in various conditions. Ready-to-drink drinks fall into the secondary product category, not primary. So, once people have enough purchasing power, they have choices for reasons of practicality, food safety, and also different tastes. They will choose AMDK. However, if people's purchasing power falls, they will focus on shopping for basic necessities, while packaged drinks will be replaced with more ordinary products. This is our biggest challenge.
Talking about maintaining purchasing power, that is not our association's job, that task is the government's responsibility. So far, 50% of domestic consumption comes from domestic sources. We hope that the government can maintain people's purchasing power.
From the association, is there any collaboration with the government or outside parties when carrying out product innovation?
As an association, we continue to convey facts on the ground so that they can be taken into consideration by the government in making their policies. On the one hand, what we do internally is ensure that our products are competitive. It's not possible if it's expensive, but we also as a company must try to remain profitable so we can run the business, pay employee salaries, etc. So our creativity as producers demands how to make products that suit consumer desires, both in terms of price and quality.
The government will implement excise duty on sweetened drinks, what is the attitude of Asrim members?
This discourse has been circulating and raised in the media for quite a long time. This is the government's effort to help maintain public health. In our opinion, the government should look deeper into whether this is the right policy. Because ready-to-drink drinks fall into the processed food category. Data from IPB 2019 reveals that Indonesian people consume 70% non-processed food and 30% processed food. Of that 30%, one of them is packaged drinks.
In this context what is being targeted is the issue of sugar or calories. If you want more detail, the calories consumed by the public come from everywhere. Apart from drinks, many food products also contain sugar. If the government only focuses on ready-to-drink drinks, its big goals will not be achieved. So if this is implemented, we as ready-to-drink beverage producers will be affected. This means that you will be subject to additional excise duties. This means that the selling price will increase. Because this is not a primary product, people will run away if prices rise. In principle, this policy is not appropriate.
So as chairman of Asrim, what do you expect?
If the goal is managing health risks, let's sit down together. Again, people's source of calories is not only from packaged drinks or ready-to-drink drinks. There are still many other food sources that supply calories. And the public can easily get it.
When it comes to readiness, what are Asrim members like?
Based on growth and development data for the last three years, we are not ready. Moreover, in 2023 only AMDK will experience growth, everything else will still be in minus and people's purchasing power will still be eroded. So we're not ready yet. If an excise tax on sweetened drinks is imposed in 2024, I am sure our performance will plummet. Moreover, in 2025, the government will increase VAT from 11% to 12%, meaning that all products marketed will increase in price. The majority of our products are sold in stalls that do not have tax status. If there is VAT compensation, they cannot enjoy it. So this is very difficult for us.
With this problem, can it be overcome by diversifying the business?
Regarding diversification, or in our terms deformulation, for example with low sugar or diet products, is our effort to reduce sugar. This is already on the market, but not many. In fact, Indonesian consumers like sweet things, so changing existing habits requires a process. It requires education and it doesn't take long. And that costs money. For example, in France, they reduce the sugar in ready-to-drink drinks gradually to levels that are considered healthy.
Another step we take is to display FOP (front of pack) on beverage packaging. Information on the ingredients in packaged drinks. The hope is that with this information, they will know how much sugar they have consumed from food and drink.
The government, through the Ministry of Religion (Kemenag), requires food and beverage traders, both MSMEs and street vendors (PKL), to obtain halal certification before 18 October 2024. What is your response?
From our side, it is quite ready. Thank God, Asrim members have had certification for a long time. With the new halal label now, we hope that the existing certification will not be lost. What is quite difficult is small and home-based businesses or MSMEs, they need to get support from the government. How can the government, in this case BPJPH (Halal Product Guarantee Organizing Agency), help MSMEs.
Are packaged beverage producers in Indonesia able to compete with producers from other countries?
We are not inferior to other countries. Domestic production has become a favorite of the Indonesian people. It is true that there are certain products that are imported, but the quantities are not large. That's more because of the uniqueness of the product. The dominant ones remain local beverage companies. The innovation of packaged beverage manufacturers in Indonesia is quite good, and it should be noted that no single company can dominate all categories. This means that there is intense competition in this sector.
During Ramadan and Eid al-Fitr, how much do they contribute to sales throughout the year?
In a year, there are two most important moments, namely Ramadan - Eid al-Fitr, which can reach 30%, and the end of the year Christmas and New Year. The rest is spread between those two moments. If depicted with a curve, during the Ramadan - Eid al-Fitr season, the curve rises, after that it slopes down. And towards the end of the year, the curve rises again. After that, it slopes again, and so on.
Is there an Asrim program to improve the quality of member production?
Representing the association, we often attend meetings, seminars or symposiums from similar organizations at regional and international levels. We often bring issues discussed at the meeting to be transmitted to the members. For example, regarding environmentally friendly packaging, because this has become a global issue that the food and beverage industry sector must also care about saving the environment.
Triyono Prijosoesilo, Apply the Concept of Balance in Life
According to Asrim Chairman Triyono Prijosoesilo, there are two important moments that increase sales of Asrim members, during Ramadan-Eid al Fitr and the end of the year; Christmas and New Year. (Photo: Bambang Eros, DI: Raga Granada VOI)
In the midst of his busy life as a professional and also the General Chair of the Soft Drink Industry Association (Asrim), Triyono Prijosoesilo tries to apply the concept of balance in living his life. Like balancing the use of time between work and family. He also applies the concept of balance to exercise and the food he consumes every day.
"As a professional, every day there is always a routine that I do in the office and organizational matters. But how to deal with it, I think being busy is something to be grateful for. Thank God, it is part of our process as humans to work and contribute to many people ," said the man who was born on January 1, 1970.
In the midst of his busy life, he tries to divide his attention between work and family. In Triyono's view, there must be a balance between work and paying attention to the family. "You have to have time for your family and also for yourself to be comfortable," he said.
And that time for him is flexible. "You can set aside time on the weekend for family or when you have work outside of town. After the main mission, I ask my family to follow me to my place of activity. Then we enjoy time together by going to tourist attractions or looking for culinary delights in the area," explained Tri who studied at SMA Negeri 70 Jakarta.
During the month of Ramadan, Triyono took the time to break the fast with his wife and children. "The place can be at home or at a restaurant that is mutually agreed upon," said Tri, who continued his studies at MacArthur High School, Texas, United States and then continued studying at the University of North Texas, Texas (1986 - 1992).
What he did was very meaningful, and provided balance in his life. It also provides a feeling of freshness and new enthusiasm at the start of the week after spending a meaningful weekend with your loved ones.
Sports Appropriate to Age
Regarding the application of halal certificates to packaged sweetened drinks, said Asrim Chairman Triyono Prijosoesilo, his party has been ready for a long time. (Photo: Bambang Eros, DI: Raga Granada VOI)
When it comes to sports for Triyono Prijosoesilo, there are no young or old. All ages should exercise at an appropriate level. However, you must be aware that you are no longer young. "My hobbies used to be running and cycling. But now, as I get older, I avoid strenuous exercise. Now I just walk," said the man who often travels to other regions and abroad for office and organizational duties.
To add to the excitement and intimacy, he doesn't do it alone. The walk was carried out with his beloved wife. "On weekdays, we only walk around the house for 30 to 60 minutes. However, if it's the weekend, we can walk further. We can go to the car free day arena in Jakarta, the duration can be up to 3 hours," added the Director of Public Affairs, Communications and Sustainability of PT Coca-Cola Indonesia.
In terms of food, Triyono also applies the concept of balance. "I will not completely avoid foods that many people are afraid of, but will try to reduce them. For example, I really like eating durian. However, it is not possible to do it every day. Usually, only once every two months," he said.
Other foods that have been reduced are offal. "But if I want to, I still eat dishes made from lung or tripe which are often made into soup. So you have to know yourself and be balanced," said Triyono, who likes to look for local food when he has work outside the city.
Triyono admitted that what he had to increase was his intake of fruit and vegetables. "I've been eating very little fruit and vegetables. So my target is to eat more vegetables and fruit to balance it," he continued.
Family Time
In matters of halal certification, Asrim Chairman Triyono Prijosoesilo urged the government to help the home-scale packaged sweetened beverage industry or MSMEs. (Photo: Bambang Eros, DI: Raga Granada VOI)
Communication is the key for Triyono Prijosoesilo to create a balance between work and family. "I always communicate with my family about my daily activity calendar," he said.
From there he and his family can plan activities together. "Joint activities can be watching films, eating, sports or other activities with the children and wife," said the father of one child.
In terms of watching films, even though he likes the mystery, action and science fiction genres, he can compromise on what his wife and children watch. "Sometimes my son asks me to watch anime, so I join in. If he doesn't understand, just ask my son. Other times, watch Korean dramas with his wife and children," said Triyono, who was willing to give in for the sake of being together with his family.
It is with this concept of balance that Triyono Prijosoesilo lives his days happily. Regarding duration, it is relative, for him what is important is quality time. Even a short time can be meaningful when used optimally.
"Typical packaged beverage products are not suitable for export. They are mostly intended to meet the domestic market. Because they are liquid and heavy, if we force the export of our products, the price will not be competitive because the transportation costs are already expensive,"
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