USA: Cola-giants lobby tax proposals
Cola giants Coca-Cola and PepsiCo have hit out at proposals by the Mexican government to add an additional 20% tax on soft drinks.
According to a report by the Financial Post newspaper both Coca-Cola and PepsiCo are lobbying against the proposals, claiming it will be as harmful to the poor as raising the price of rice, beans and tortillas.
One beverage analyst said that Coca-Cola Femsa, Mexico's largest coke bottler would need three to four years to make up the profit lost by the proposed tax. Higher prices would lower sales volumes and profit margins.
In Mexico lower-class families, according to the National Association of Soft-Drink Producers (ANPRAC), consume some 87% of soft drinks.
Earlier Rodrigo Calderon, spokesman for Coca-Cola in Mexico said: "It would basically hit the less privileged classes."
In a bid to protect the US$5bn-a-year Mexican market, according to the Financial Post a full-page advertisement was placed in Tuesday's El Financiero newspaper by the country's soft drink producers saying that 60% of their sales are to Mexicans earning less than US$10 a day.
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