The price of soft drinks, cigarettes and energy drinks saw a 50% hike across the emirates when the new UAE excise tax law came into effect on October 1, 2017.
Two days in, it seems that initial uncertainties about how the implementation of the initiative and its knock-on effects have been laid to rest. Speaking exclusively to Caterer Middle East, Freedom Pizza founder and CEO Ian Ohan said: “I don’t see this as a cause for concern, rather, in my view it is a win-win. It will be putting money back into government resources and hopefully reduce the over-all consumption, which will contribute to a healthier population. Sugary soda has no nutritional value whatsoever and serves no functional purpose in anyone’s diet. It does more harm than good, so tax away in my opinion.”
When asked about how the new tax would affect Freedom Pizza’s bottom line, Ohan explained: “I don't think it will affect sales very much at all. Those that really want these items will simply adjust to the new pricing. Nevertheless, we do offer a number of alternative beverages on our menu, keeping in line our healthier offerings in general.”
Speaking about the practicalities of implementing the new pricing, Ohan added: “Overall it is an easy adjustment, the main change is that we pay the suppliers the increased amount. We have only passed on the absolute Dirham increase amount to our customers, as most of our sales are online therefore the change in price is easily handled.”
This is the first in a series of taxation reforms set to take place across the GCC in the coming months. The UAE will see the implementation of VAT on January 1 2018 with other GCC countries — Bahrain, Kuwait and Oman expected to follow suit.
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