Tanduay Holdings Inc. is opposed to the proposal to revise the excise tax on alcohol, saying it will lead to a shift to cheaper alcoholic drinks which, in turn, will translate into lower tax collections.

Nestor Mendones, Tanduay chief finance officer, said taxation should not be used as an instrument to alter market preference.

The current rate is P13.69 per proof liter of alcoholic drinks. The tax is collected automatically at the distillery door.

If consumers shift to native drinks which come from a mass of small and backyard producers, the government will lose substantial revenues.

Mendones said the proposal of the DoF is to increase the excise tax to P30. The effect will be an increase in retail prices of between10 and 15 percent or P4 to P10 per bottle.

"If the measure is passed, people may shift to other cheaper drinks, our biggest competitor in the province," said Mendones.

Mendones said Tanduay does not offer a counter-proposal but suggests that the current law be retained until its expiration in 2011.

He said government, in the meantime, can implement the scheduled adjustments under the current law.