Juice industry urges excise duty cut to 10%

Pakistan's packaged fruit juice industry has urged the government to reduce the federal excise duty (FED) on juices from 20% to 10% in the upcoming budget, warning that heavy taxation has damaged the formal sector, reduced fruit procurement and encouraged undocumented players.

In letters to the finance minister, the FBR chairman and chairperson of the National Assembly standing committee on finance, the Fruit Juice Council (FJC), representing major manufacturers including Nestlé, PepsiCo, Shezan, Haleeb, Popular and Tetra Pak, said industry volumes plunged by more than 45% after the imposition of 20% FED in the 2023-24 budget.

The formal packaged juice industry, once valued at nearly Rs60 billion in 2021-22, has shrunk to about Rs40 billion in 2025, with volumes falling close to 2017 levels.

The sector traditionally played a major role in supporting local agriculture by procuring mangoes, kinnows, apples and guavas from farmers. The industry procured nearly 100,000 tonnes of local fruit in 2022 for pulp processing. However, fruit procurement volumes have now dropped by more than 50% compared with 2022 after the excise duty was imposed.

Industry representatives warned that the decline in the formal sector has created space for undocumented manufacturers offering cheaper, potentially unsafe alternatives. The undocumented segment is estimated to account for nearly 20% of the market, expanding rapidly as consumers shift to lower?priced products outside the tax net.