Marketing, Product, and Pricing Strategies of Beverage Firms Facing Indonesia Sugar Tax
Keywords:
Sweetened Beverage Excise, Industry Strategic Response, Product Reformulation, Health Policy, Marketing StrategyAbstract
The excise policy on packaged sweetened beverages (MBDK) has been adopted globally as a public health instrument to suppress sugar consumption and encourage product reformulation. In Indonesia, the discourse on the implementation of this policy is strengthening as the prevalence of non-communicable diseases increases. Although many international studies have examined the impact of these policies on the consumer side, there is a significant research gap on the anticipatory strategic response from industry, especially in the context of developing countries. This study aims to qualitatively explore the strategic response of beverage companies in Indonesia to the MBDK excise implementation plan, focusing on the adaptation of marketing, product, and price strategies, as well as the challenges faced. This study uses a qualitative approach with multiple case study designs. Data was collected through in-depth interviews with key managers, analysis of company and media documents, and non-participant observations. Data analysis was carried out thematically using the Resource Based View (RBV) theoretical framework to interpret the findings. The results of the study identified a shift in industrial attitudes from rejection to anticipatory readiness, viewing excise as inevitable. Key strategic responses include: (1) product innovation and reformulation to reduce sugar content; (2) planning a pass-through pricing strategy that imposes excise on consumers and price differentiation to encourage healthier choices; and (3) a shift in marketing communication that emphasizes a "low-sugar" narrative. The main challenges faced are the limitations of R&D capabilities, especially for local companies, and the uncertainty of policy design from the government. Theoretically, the study integrates several frameworks to explain pre-regulatory corporate adaptation. Managerially, these findings underscore the importance of proactive investment in R&D. For policymakers, the study indicates that the industry is ready to adapt and suggests tiered levy designs to maximize policy effectiveness in driving product reformulation and achieving public health goals. This study is one of the first studies to explore the response of the beverage industry's strategy to excise policies in developing countries (Indonesia), thus filling the literature gap that has been dominated by studies in developed countries.
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