Coca-Cola HBC Italia has halted further investments at its production sites in Italy, after the government announced new taxes on sugar content and plastic.
The impact of the sugar tax on companies such as Coca-Cola is estimated at about €140 million a year, and the multinational also expects a 10% drop in sales volumes as a result of the increase in sales price.
The company said that if the situation remains unchanged, it plans to close one of its Italian plants by June.
Albania Operations
As a result of the increased taxes, Catania-based Sibeg, which produces, bottles and distributes Coca-Cola and other beverages, has announced its intention to localise production in Albania.
In Tirana, Sibeg operates a Coca-Cola bottling plant, which produces about 10 million cases per year – compared to 27 million produced in Catania.
Silbeg CEO Luca Busi told Il Sole 24 Ore that the new taxes on its Italian business will cause a 30% loss of turnover, from €115 million to €86 million.
For this reason, the first layoffs at its Catania facility will commence in October 2020 and production would then be transferred to Albania.
Busi highlighted that Coca-Cola pays a flat tax of 15% in Albania, whereas in Italy the total corporate tax now exceeds 60%.
Tax Hikes
On 13 January, the Italian government announced the introduction of new taxes on plastics and sweetened drinks in its 2020 budget, with a view to raising €1.3 billion.
The tax on plastic will force companies to pay €1 per kilo of plastic produced, while the tax on sugar is motivated by the need to fight health problems such as obesity, diabetes or dental problems, similar to the taxes adopted in France or the UK.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine
