Sugar tax, weak sales cited as Seprod temporarily lays off 141 workers

The additional cost of sugar-based juices as a result of the “sugar tax” is among the reasons the Seprod Group says is behind a decision to temporarily lay off 141 workers.

Finance Minister Fayval Williams announced the tax during her Budget presentation earlier this year.

Under the regime, beverages with zero added sugar incur no tax, while drinks with added sugar are taxed proportionally by weight.

Chief Executive Officer of the Seprod Group, Richard Pandohie, told The Gleaner that the group made the decision “following a decline in revenue sales”.

“Yes, we are temporarily doing layoff for three weeks at one of the factories. It will be done on a rotation basis to minimise anyone being impacted by a full three weeks, and some persons have also opted to take vacation,” Pandohie explained.

“We have seen sales decline and this has led to significant inventory build-up that we need to normalise.”

Pandohie, who is also Managing Director, told The Gleaner that a convergence of factors was contributing to the lower demand.

“It was not an easy decision and one that we tried to avoid, but it makes no sense piling up inventory and end up dumping them because they expire,” he said.

“We didn’t even lay off one person in COVID, so you know this is painful for me. But we will get through this. The economy is tight right now, plus the hotel industry impact is real. Retailers in areas like Hanover are still trying to recover, and the additional cost for sugar-based juices due to sugar tax is having an impact.”

The layoffs become effective on Monday.

- Karen Madden

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