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Coca-Cola In Dispute With Brazil Over Loss Of Tax Breaks

August 21, 2018: 12:00 AM EST
To settle a truckers strike in May, the Brazilian government raised $3.4 billion by cutting soft drink manufacturers’ tax breaks. Needless to say, this did not sit well with the 59 members of the Brazilian Association of Soft Drink Manufacturers (Abir), which includes Coca-Cola, Inbev, and PepsiCo. Now Coke is threatening to stop production in the Manaus Free Trade Zone – and shift it to another country with better tax incentives – unless Pres. Michel Temer restores the breaks. A bill establishing the tax on industrialized products at 15 percent could be introduced before Temer's mandate is over, but the government would like to punt the problem to the next president. Moving out of Brazil would mean a loss of 15,000 jobs in the soft drinks bottling industry there.
Julio Wiziack & Maeli Prado, "Coca-Cola Threatens to Leave Brazil If Free Trade Zone's Subsidies Are Not Returned", Folha de S.Paulo, August 21, 2018, © Folha de S.Paulo
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