Fiji Water closes operations

Last updated 17:09 29/11/2010

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One of Fiji's major exporters - Fiji Water - suddenly closed its operations this afternoon as its battle with the military regime there escalated.

Fiji Water, marketed across the world in small square bottles, has become the major bottled water in the US and Europe.

However military strongman Voreqe Bainimarama has been trying to get them to pay a tax and last Friday slapped a 15 per cent "water resource tax" from 2011.

He also deported the CEO of Fiji Water, David Roth.

In a statement this afternoon the president of Fiji Water, John Cochran, said the tax was untenable and they were left with no choice but to close down the Fiji facility.

He labelled the tax as "discriminatory" as Fiji Water - which currently pays one-third of a cent per litre - is the only bottled water producer in Fiji that will be affected.

Cochran says executives are saddened that they have been forced to make a business decision that will result in hardship to hundreds of Fijians.

In addition Fiji Water will be putting on hold several large construction contracts in Fiji worth millions.

Cochran says Fiji Water will also be forced to cancel all contracted engineering and support services.

Around 400 people have lost their jobs.

The action against Fiji Water follows the military regime earlier this year forcing Rupert Murdoch's News Corp to quit Fiji. The regime made them sell their daily Fiji Times to a local owner.

Cochran said the current action on the tax sends an unmistakable message to businesses operating in Fiji that the country is increasingly unstable, and is becoming a very risky place in which to invest.

Earlier this month Defence Minister Epeli Ganilau quit after he refused to carry out a deportation order on Roth.

Fiji Water is privately owned by Los Angeles billionaires Stewart and Lynda Rae Resnick. They also own Teleflora and the Franklin Mint.

Two years ago the military government tried to put a 20 cent per litre royalty on Fiji Water, but yielded to pressure from the company when they said they would pull out if taxed.

Fiji Water earns around US$150 million ($200 million) a year in sales and makes up 20 percent of Fiji exports and 3 per cent of its gross domestic product.

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