Coca-Cola reaffirms €17m French investment plan
Media reports yesterday stated that Coca-Cola France had suspended the investment following a government decision to increase value-added tax (VAT) on soft drinks with added sugar, as part of a new €12bn austerity package announced on Tuesday.
From January 2012, VAT on soft drinks will rise from 5.5% to 19.6% in a move that the French government believes will generate an extra €120m in tax returns.
Setting record straight
A regional company spokesperson said that the investment had “not been cancelled, but is being re-evaluated within the uncertain context created by this tax”.
However, in a statement released soon after, Hubert Patricot, European group president for CCE said: "We regret that our local team caused confusion … related to Coca-Cola's sincere commitment to France and the growth of its economy."
“I would like to set the record straight. We are re-confirming our €17m investment to our Les Pennes-Mirabeau facility.”
“Let there be no doubt, and let me say it as a Frenchman: Coca-Cola is committed to France. We employ 3,000 people here and have invested EUR260 million in France over the last six years.”
However, Patricot said CCE remained “strongly opposed to a tax that unjustly targets the purchasing power of the French people and one category of beverages under the pretext of addressing public health concerns”.
‘Stigmatisation’ opposed
A French website statement from the CCE said the tax hike could affect its activities in the country and 3,000 employees therein.
The tax would mean prices rose 3.5%, said CCE, since the tax followed raw material prices rises for inputs such as sugar, which has increased by about 40% in 12 months.
"As a player in the French economy, Coca-Cola shares collective efforts to reduce the public deficit. But we are strongly opposed to…stigmatisation of our products… unfairly considered as products such as spirits and tobacco," the firm said.
Patricot said that consumer education on exercise and balanced diets, rather than “discriminatory taxes” should be preferred as a way forward.
He said CCE remained committed to working with government, nutritionists, and public policy experts to address ongoing public health concerns.
