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Fiji Water to stop operating in Fiji

The Los Angeles-based company says it's shutting down operations in the island nation because of a large tax increase.

November 30, 2010|By Tiffany Hsu, Los Angeles Times

Fiji Water might no longer come from Fiji.

The Los Angeles-based bottled water company, owned by billionaire entrepreneurs and art patrons Lynda and Stewart Resnick, said it's shutting down operations in the island nation because of a large tax increase.

The country plans to raise the tax it levies on the company to 15 Fijian cents a liter from one-third of a Fijian cent, according to a statement by the company.

In U.S. dollars, the new tax is about 8 cents a liter.

Fiji Water Co. said in a statement that it was laying off nearly 400 Fijian employees and canceling construction projects in the country.

Fiji Water President John Cochran said in the statement that the tax increase was "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." He said the company has paid millions of dollars in duties and income taxes to the Fijian government.

The Fijian government was installed in a military coup in 2006. It has been widely criticized for not holding elections.

The interim prime minister of Fiji, Commodore Frank Bainimarama, said in a statement that Fiji Water has paid less that $600,000 in taxes to the country.

The bottler, he said, attacked the nation's political situation "because they simply do not want to pay the new taxes."

Bainimarama, who led the 2006 coup, said the country would look for another bottler.

"If Fiji Water is no longer interested in Fiji, then the Fijian government, following cancellation of the leases, will call for international tenders from credible and reputable private-sector companies to extract this valuable resource," he said.

It's not clear whether Fiji Water would switch operations to another country. Executives at the company declined comment beyond Cochran's statement.

The Resnicks' Roll International Corp. bought Fiji Water in 2004 from a Canadian resort owner who founded the company in 1996.

In September, the Federal Trade Commission took issue with another Resnick company, Pom Wonderful, alleging that the pomegranate juice maker was making false and unsubstantiated health claims.

The Resnicks have been major contributors to the Los Angeles County Museum of Art. This year, the 45,000-square-foot Lynda and Stewart Resnick Exhibition Pavilion opened on the LACMA campus.

tiffany.hsu@latimes.com

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