Juice industry seeks 5% FED cut to revive formal sector

LAHORE: The packaged juice industry has called on the government to reduce the Federal Excise Duty (FED) by at least 5.0 per cent in the 2025-26 budget, warning that the current 20per cent FED, alongside 18per cent GST, is crippling growth and fuelling the informal sector.

Industry officials reported a 45per cent decline in sales volumes since the FED’s imposition in 2023, resulting in revenues falling to Rs42 billion, down from over Rs72 billion in 2022-23. The downturn has also hurt government revenue targets for FY2024-25.

The tax burden, which accounts for around 42per cent of the retail price, has made formal products unaffordable, pushing consumers toward cheaper, low-quality alternatives with no real fruit content. The shift has also reduced fruit procurement, impacting farmers and pulpers. At its peak, the formal sector sourced over 100,000 tonnes of fruit. Last year, mango procurement alone dropped to 20,233 tonnes, down from 31,000 tonnes in 2017-18.

Industry players warned that the contraction has led to job losses, idle production capacity and a halt in investment. They urged the government to clamp down on unregulated operators and consider forming a task force to monitor illicit manufacturers. They also advocated for a progressive tax model, noting that many countries offer favourable tax rates for products with natural fruit content to promote healthier consumption.