Coca-Cola Suspends France Investment over Soda Tax

'We want to make a symbolic protest against a tax that punishes our company and stigmatizes our products' Coca-Cola said.

Coca-Cola on Sept. 8 postponed planned $24-million investment at a plant in the south of France to protest a new tax on sugary drinks.

Prime Minister Francois Fillon announced the tax on August 24 as part of the government's fight against obesity and within the framework of a broader austerity program.

"This (investment) has not been cancelled but it must be re-evaluated in the context of uncertainty created by the tax," the company said.

A spokeswoman said the company would wait to see how parliament's debate and vote on the new tax would go in the coming weeks.

Coca-Cola Enterprises' global president John Brock's visit to the site at Pennes-Mirabeau near the Mediterranean city of Marseille for the plant's 40th anniversary has been cancelled, the company said. "We want to make a symbolic protest against a tax that punishes our company and stigmatizes our products," Coca-Cola said.

The tax is expected to come into effect in early 2012 and bring in 120 million euros for state coffers. It works out as one euro cent per can of drink.

France's Budget Ministry said the decision was "regrettable in economic terms, but it cannot be linked to the one-cent cost rise for a can of soft drink, which is motivated by public health objectives."

"The one cent tax does not threaten this industry," a ministry spokesman said.

The lawmaker for the region where the Coca-Cola factory is located, Valerie Boyer of President Nicolas UMP party, said she was "absolutely shocked" by the company's "blackmail."

France's food and drink association ANIA said however it understood Coca-Cola's decision. "The Fillon tax is the stigmatization of food and drink products whose harmfulness has not been scientifically proven," ANIA's Jean-Rene Buisson told AFP. "This stigmatization is unacceptable. I understand Coca-Cola's position."

Coca-Cola employs around 3,000 people at five sites around France. The Pennes-Mirabeau facility employs 203 people and has had 45 million euros invested in it over the last five years, the company said.

Copyright Agence France-Presse, 2011

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