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Venezuela’s tax man pops Coke
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Mar 7, 2007
Venezuela’s tax man pops Coke TEXT OF STORY
SCOTT JAGOW: Have you heard what Coke and Pepsi are up to now? Both companies say they’re gonna roll out new sodas this year that have vitamins and minerals in them. Diet Coke Plus and Tava from Pepsi. Coke’s CEO says diet and light sodas are actually health and wellness brands. And he’s not calling them sodas anymore. They’re “sparkling beverages.” OK, as long as I don’t have to call them that.
While we’re on the subject of Coke, the company’s operations in Venezuela will have to shut down for three days. Coke is accused of breaking some tax rules there. Dan Grech reports from our America’s Desk at WLRN.
DAN GRECH: Coca-Cola Femsa is the largest distributor of Coke drinks in Latin America and its being punished by Seniat, Venezuela’s tax agency, considered the most the most efficient arm of President Hugo Chavez’s government.
In the first eight weeks of the year Seniat closed more than 3,800 businesses for tax violations and levied fines of $2.1 million.
Phil Gunson is Venezuela correspondent for The Economist.
PHIL GUNSON: Seniat under the Chavez government has vastly increased the government’s tax revenue by applying what it calls ‘zero tolerance policy.’
Gunson says it’s not clear if Coke’s Femsa is a target.
GUNSON: Femsa does have a history of a political clash with people on the government’s side, particularly deputies in the national assembly.
In October, contractors and former workers blockaded Femsa in severance dispute. One lawmaker has even called on the government to seize Femsa assets.
The company denied breaking any tax rules and said it will abide by the ruling.
I’m Dan Grech for Marketplace.
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Venezuela’s tax man pops Coke