In talks with ProPakistani, officials from Pakistan’s fruit juice sector have sounded alarm over what they call “crippling” tax policies that are driving the industry into decline and boosting unregulated, low-quality alternatives.
The packaged juice industry has urged the government to slash the Federal Excise Duty (FED) from the current 20% to at least 15% in the upcoming 2025-26 budget, warning that the current tax burden—combined with 18% GST—has made formal juice products unaffordable for the average consumer.
Industry stakeholders reported a steep 45% drop in sales volumes since the FED hike was introduced in 2023. Revenues have plummeted to Rs. 42 billion from over Rs. 72 billion in 2022-23, with direct consequences for farmers, manufacturers, and government tax targets alike.
“The reality is simple,” one industry insider told ProPakistani. “The tax now makes up over 40% of the product’s retail price. That’s pushed consumers to the informal sector that is unregulated by food regulators. Meanwhile, legitimate businesses are bleeding, and that’s the bottom line.”
The impact on agriculture has been just as severe. At its peak, the formal juice industry sourced over 100,000 tonnes of fruit from local growers. But in 2024, mango procurement alone fell to 20,233 tonnes, diminishing significantly from 31,000 tonnes in 2017-18. This drop has affected pulpers, packers, and thousands of farmers across fruit-producing regions in the country.
Industry representatives stressed the need for urgent government intervention, including the formation of a task force to crack down on the illicit sector and the adoption of a progressive tax model/decrement in taxes that incentivizes healthier options with real fruit content. They pointed to international models where natural juice products receive favorable tax treatment as a way to encourage better nutrition without punishing formal businesses.
“We’re not asking for handouts,” said one insider. “We’re asking for a policy that’s sustainable—for business, for farmers, and for public health.”
Without reform, the sector warns that more job losses, stalled investments, and a continued rise in substandard, unregulated products are inevitable.