Photo via afroswede via Flickr Creative Commons
Yesterday, Fiji Water, one of the iconic brands of bottled water, made rumblings of shutting down their Fiji-based bottling plant after the government announced a plan to bump up the business tax on bottled water from F$0.003 per liter to F$0.15 per liter. In fact -- they did, closing their factory doors and firing 400 workers. For the company, the tax hike is an increase of F$0.5 million per year spent on water taxes to over F$22 million. While that's a massive increase in how much is spent on taxes, it's still small change when considering how much the company makes on their product and how much water -- a precious commodity in shrinking supply -- should really cost in the first place. So will Fiji Water leave Fiji? Fiji Water was hoping that the government will bend to the threat of the company closing up shop, which would mean the end of many jobs for Fijians, a major loss in exports and a drop in gross domestic product of which the bottled water represents 3%. A similar tax hike threat was made in 2008 and the country bowed then, but as of yesterday, the government looked to be taking a firmer stance this time around and perhaps it would follow through with the plan.
Mother Jones reported, "Fiji Water has, however, benefited from tax-exempt status on its corporate income, granted when the company was founded in 1995 and extended ever since. Court documents submitted by the company in 2008 showed that Fiji Water was owned by an entity in Luxembourg, a tax haven, and recent Swiss financial records also show Fiji Water owners Stewart and Lynda Resnick transferring Fiji Water assets to companies in Switzerland. (The company has also trademarked the word "FIJI" in the Cayman Islands.)"
Peter Gleick, a water expert at the Pacific Institute, wrote, "The dispute highlights several questions for bottled water producers and Fiji Water in particular. Should they continue to do business in a country with a military dictatorship, where local communities have little or no say in how local resources are exploited? Does their presence and economic strength in the country help prop up Fiji's government? How can the company claim to be socially responsible when they operate businesses in regions where political instability, government corruption, and a lack of transparency are prevalent, like Fiji."
Gleick also pointed out that the company's newest problem helps highlight a bigger issue -- why would anyone pay upwards of $4 of water that has been shipped in from a far-off location, creating a HUGE carbon footprint for the same product as what comes out of the kitchen tap?
Perhaps the end of Fiji Water wouldn't be such a bad thing. The company certainly had a good stomping fit and shook its fist at the government. But the government seems to be standing firm -- It's Fiji Water that is bending this time.
This morning, Mother Jones points us to news that the bottled water company is here to stay. After quickly shutting down the plant and firing its workforce, Fiji Water has reopened its factory doors after agreeing to pay the F$0.15 tax once the government made clear it was not going to change its stance.
Looks like Fiji Water is around for awhile longer, though we aren't sure if the tax hike will affect the shelf price of the already expensive water. Either way, buying bottled water is still a bad idea, no matter how "green" it claims to be.
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