As part of an ongoing dispute over the Fijian government’s stake in its revenues, FIJI Water announced that it has “no choice but to close” its operations plant in Fiji, according to a statement released on November 28 by company president and COO John Cochran. In the document available on FIJI Waters’ website, Cochran cited a new 15 cent-per-liter tax on bottled water as the reason.
The Fijian government announced that it will apply this tax to locations at which 3.5 Million liters of water per month are extracted. FIJI Water would be the only company in the country that is affected by the fee, according to Cochran’s statement; other bottled water producers extract less than this amount and will only be taxed by 1/10 of a cent.
However, this isn’t the first time that FIJI Water has threatened to close its plant — it made a similar threat last year after the Fijian government announced it would tax the company 20 cents per liter of water. Subsequently, the government dropped this tax and the facility remained open.
The latest tax will be in place starting in 2011.
Cochran has thus far called the tariff discriminatory – saying that FIJI Water would be the only target – and untenable, yet said the company is saddened to make “a business decision that will result in hardship to hundreds of Fijians who will now be without work,” according to the statement.
He concluded his statement by explaining that “FIJI Water remains willing to work through this issue with the Fiji government, as it would be our preference to keep operating in Fiji.”
The statement can be read in full here: http://www.fijiwater.com/blog/2010/11/29/discriminatory-tax-forces-shutdown-of-fiji-water-factory/