LAHORE, July 2: The Lahore Chamber of Commerce and Industry (LCCI) will strongly take up the beverage industry’s concerns on the federal budget with Finance Minister Ishaq Dar.

This assurance was given by LCCI President Farooq Iftikhar while talking to a delegation of the Pakistan Beverage Association on Tuesday.

Iftikhar said the government should provide an opportunity to small and medium players in the beverage industry to explain their point of view before the imposition of capacity tax.

Former Pakistan Beverage Association chairman Ikram Elahi, who led the delegation, informed the LCCI president the capacity tax would hit hard the low-profile international brands and local brands, which created a strong competition and enabled the consumers to get beverages at a competitive price.

“One fails to understand why it wants to repeat the same mistake of 1991, which had resulted in the closure of dozens of beverage and juice units. In the current scenario where there is severe shortage of gas, electricity, there is a disparity in distribution of energy between provinces, cities and districts. How could such a system work? It is our request to the government this is not the time to conduct experiments, the FBR should learn from its previous mistakes,” he said.

Elahi said in this modern age taking the advantage of technology, cameras could be installed to monitor the production and clearance of beverage unites along with reintroduction of supervised clearance for at least three years. That would enable the government to practically evaluate and determine the actual sales and clearances of the beverage industry of Pakistan, he added.

Elahi, who is the chief executive of one of the oldest fruit juice plants in the country, regretted the government had neither talked to nor given any opportunity to small and medium manufacturers to listen to their side of the story on the tax.

His two plants in Multan and Islamabad had already closed down as a result of the 1991-94 capacity tax and he had now given notice to the Federal Board of Revenue (FBR) for the closure of his plant in Lahore, which would send an alarming signal to the prospective investors.

He said post 1991 capacity tax, two multinational beverage companies had a total of 55 per cent market share while the remaining 45 per cent was with low-profile international brands and local brands. This created a strong competition and enabled consumers to buy beverages at a competitive price and barred the multinational giants to create a monopoly.

Elahi said to eliminate this competition that was a hurdle in profiteering, these multinationals approached the government to introduce the scheme and succeeded. Now in 2013, the market share of these two multinational companies was above 90 per cent and the remaining 10 per cent with low-profile brands.

To eliminate the remaining competition from this 10 per cent segment, these multinational firms had again lobbied the government to reintroduce the same system, he lamented.