Discussion
For some instances the European Union court system is very strict in implementing the law with the drink packages for which for them, it discriminates the other products. It may sounds simple sir, but they are imposing the tax law all over the states that are member of the European Union. Recently, the Arcadia and Sylvania which are the countries subject for our marketing abroad. Therefore, we have to think twice before setting our feet in their territory. On the other hand, I prepared a report that revolves about the consequences of European Union’s tax law when our company decided to stick on the first plan. The report is based on the assessment of the applied law within the area of European Union and I included my suggestions and assumptions. But still, in full respect, the decision will still be in the hands of the company president.
The European Union established the standard in dealing with the bottled mineral water business. Taxing the bottled water will be favorable in Arcadia, since their motivation in adopting this tax law is to create pipelines that will deliver the water they needed. More over, it is important for them to adopt this policy to answer the financial crisis that they are facing right now. But the company is not against nor supporting this kind of idea.
The scheduled additional cent taxed in bottled water will create burden if the company will try to enter the market of Arcadia. On my view point, the aquafizz is also subject for investigation, in which the European Union will measure its safety for distribution. In the package or in the bottle, the following standards should be followed. The aquafizz must present all the detailed composition in which it is basic mandatory not only for natural mineral waters. This is their way of assuring that the water is stable enough for drinking.
The place of exploitation of aquafizz should be included in general regulations. Another is the traceability that has a requirement to name the source, packer, and the distributors of aquafizz. In this way the European Union is can trace the bottled water and reassuring the consumers. The lot or batch mark is also important to identify the type of provide, or in which category the aquafizz falls.
It maybe sounds impossible but the “best before” seal should be placed in the drink. The reason behind this is about the unexpected retain of specific properties that was accidentally stored when improperly processed. Again, it is all for the safety of the consumers. Other than that are the volume of the package, instructions for use and storage. The origin is another important element in which the name of the business is indicated and address of the packer. And lastly is the nutrition labeling is also included because most of the times, mothers use the water for infants.
The routine sampling of water supplies are also part of the inspection before passing the Arcadian market. With our strict compliance with these requirements, there is no doubt that the business can adopt the market environment easily. But the problem is about the business survival. The tax imposed is always subject for change and reorganization and when the business reached that time, the business might able to handle the tax burden.
In addition, the consumers will also experience that imposed tax since they are the one who will carry the additional cents of it. Therefore it is better if the company will find another market domain where there is a little tax over the bottled mineral water. Meanwhile, in the subject of tax law in Sylvania, I proposed the two options: it is either the business will reduce the alcoholic content of energize or, find another market domain like in Arcadia. The value that the government imposed over the bottled drink is over 12 %, and since the business doesn’t want to lose another market advantage therefore, we have to make sacrifices. Energize has an advantage in Sylvania because the people haven’t tasted the products offered of Aquatonic and this will give us a chance to enter their market successfully. In my prospective view, the tax they will give to us is not that heavy to carry since we will comply on their scheduled tax law.
Besides from gaining the taste preferences of the Sylvanians, I assumed that the business will technically experience minimization of costs in alcohol. For a year, the Aquatonic will minimize the use of alcohol in about 30%, where can be directed in another series of production. The alcoholic content is the only element subjected for taxing and not the ether that has a pleasant smell to attract the consumers. Maybe the costs we subtracted from purchasing the alcohol can be used or diverted to acquire other ingredients that are essential for the production.
In summary, both countries applied the European Union Law and very strict in implementing the tax law. There is no additional tax on domestic water but the imported bottled water is included in the categories of soft drinks, syrups, and alcohol. The aquafizz and energize will act differently in European market. It is good that they are encouraging and not discouraging the consumption of goods but it will definitely hit the business performance of all the firms. The only problem is that the rates applied in European Union member states are different – some are as low as 5% making the competition within the European Union unfair to others, especially when there is a small business player. In my own assumption, the tax discrimination of the European Union is another way to measure the abundance of natural resources, where it can be both utilize but not to the extent of exploiting.
Works Cited:
Labeling: Trade Description and Sales Description [Online] Available at: http://www.efbw.eu/images/file/Labelling%2021%2009%2009.pdf. [Accessed 17 Nov 2009].
Miller, D., 2007. Bottled-Water Tax Idea Flows. [Online] Available at: http://www.canada.com/topics/finance/story.html. [Accessed 17 Nov 2009].
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