Fiji Water closed its operations Monday in the South Pacific country that gives the popular bottled drink its name, saying it was being singled out by the military-appointed government for a massive tax increase.
A company statement did not say whether it was shutting down permanently in Fiji, where an aquifer deep underground has been the source of one of the world's most successful brands of bottled water. The company, owned by California entrepreneurs Lynda and Stewart Resnick, said it was closing its facility in Fiji, cancelling orders and putting on hold several construction contracts in the country.
But Fiji Water added in the statement from its headquarters in Los Angeles that it wants to keep operating in Fiji and is willing to hold discussions with the government.
Fiji Water president John Cochran said Fiji's government announced last week that it was imposing a new tax rate of 15 cents per litre on companies extracting more than 3.5 million litres of water a month, up from the current rate of one-third of one per cent. Fiji Water is the only company extracting that much water.
"This new tax is untenable and as a consequence, Fiji Water is left with no choice but to close our facility in Fiji," stated the company, which sells its product in more than 40 countries.
The government's action "sends a clear and unmistakable message to businesses operating in Fiji or looking to invest there: the country is increasingly unstable, and is becoming a very risky place in which to invest," Cochran said.
The tax rise comes amid a deep downturn in Fiji's economy that is blamed on political instability following a coup in 2006 by armed forces chief Frank Bainimarama — Fiji's fourth coup since 1987.
Key trading partners have imposed sanctions, including European Union restrictions on the sugar industry. Rupert Murdoch's News Corp. sold its controlling stake in Fiji's main daily newspaper in September after the government imposed strict new foreign ownership limits on media companies.
The Resnick's Roll International Corp. bought Fiji Water in 2004 for an undisclosed sum from Canadian businessman David Gilmour, a resort owner who founded the water company in 1996.
Earlier this month, Fiji Water executive David Roth was deported from Fiji to the United States for what the government said was acting "in a manner prejudicial to good governance and public order." The deportation order, issued by Bainimarama, caused acting prime minister Ratu Epeli Ganilau to resign.
Fiji Water says its product comes from deep underground in the remote Yaqara Valley on Fiji's main island of Viti Levu, and never comes into contact with the air before it is bottled, making it clear of pollutants.
Cochran said Fiji Water pays millions of dollars in duties and income tax, as well as royalties and trust fund payments to Fijian villages near the company's facility. He said hundreds of Fijians would lose their jobs because of Monday's decision.
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