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The Food and Beverage Association of Ghana (FABAG) has expressed concern over the government’s recent move to classify sugar as a “dual-purpose” product, a decision they fear could harm local businesses and lead to higher costs for consumers.
In a statement released earlier this week, FABAG urged the government to reassess the classification, which treats sugar both as a food product and an industrial input. This change in categorization has sparked a debate over its potential impact on the food and beverage industry, particularly on local manufacturers who rely heavily on sugar as a key ingredient.
According to FABAG, the new classification could lead to an increase in the tax burden for food manufacturers, pushing up production costs and, consequently, the prices of finished goods. The association, which represents a wide range of food and beverage producers, argues that these added costs could disproportionately affect small and medium-sized enterprises (SMEs) that are already struggling with limited resources.
Kwaku Asante, President of FABAG, highlighted that local companies could be placed at a disadvantage compared to imported products, which may not be subject to the same regulatory framework. “This new classification could be a setback for our local food industry, and it could lead to job losses and a reduction in production capacity,” Asante said. “We need policies that support local businesses, not ones that impose unnecessary financial burdens.”
FABAG also raised concerns about the broader implications for the economy, stressing that the increase in production costs would likely result in higher prices for everyday consumer products, from beverages to baked goods, which could place further strain on Ghanaian households already grappling with inflation.
In response to the concerns raised by FABAG, the Ministry of Food and Agriculture has defended the new policy, claiming that the dual-purpose classification is intended to better regulate the sugar market and ensure transparency in its use. The government has also argued that the move will help streamline the allocation of sugar imports and protect local production.
However, FABAG has called for a collaborative review of the policy, emphasizing the need for a balanced approach that considers the sustainability of the food and beverage sector and the welfare of consumers. The association has requested a meeting with government officials to discuss potential adjustments to the policy, with the goal of finding a solution that does not penalize local manufacturers or result in price hikes for consumers.
As the debate continues, industry stakeholders are keeping a close eye on the issue, hoping for a resolution that will allow Ghana’s food and beverage sector to thrive without the added pressure of high taxes and regulations that could hurt their bottom line.
FABAG has promised to continue advocating for the interests of local manufacturers and is committed to working with the government to find a fair and effective policy that benefits both the industry and consumers alike. Further updates on the discussions are expected in the coming weeks.
Story by Efua Nessa
Source:Loco tv