Fiji water wars

Whether it's just a ploy or a permanent shutdown, L.A. billionaire Stewart Resnick has pulled the plug on Fiji Water's only production plant after the tiny Pacific Ocean island nation raised the company's tax rate, But what happens to Fuji Water lovers? Resnick has a potential backup source in New Zealand, reports Mother Jones, where he owns Spring Fresh bottled water (supposedly comparable in taste). Actually, the tax dispute has been going on for quite some time, leading Fiji Water fans around the world to buy up stocks of the stuff just in case this day would arrive.

The abrupt shutdown comes just three days after the government announced the 2011 budget, which proposes increasing Fiji Water's "extraction tax" to 15 cents a liter up from one-third of a cent. A week ago, Fiji Water Director of External Affairs David Roth was deported from Fiji. (The country's then acting Prime Minister and simultaneously Minister of Defense, National Security and Immigration, Ratu Ganilau, resigned in protest of Roth's deportation.)

Prime Minister Voreqe Bainimarama said that Roth had been interfering in the domestic affairs and governance of Fiji, though he would not explain the nature of that interference. "It is unfortunate that David Roth saw it fit to engage in activities outside of his work permit conditions," Bainimarama said. The government later stressed that the issue was between the government and Roth, not Fiji Water. In a statement released today from California, Fiji Water President John Cochran said that the company was hoping to work with the government to resolve the tax dispute, but added that "the country is increasingly unstable, and is becoming a very risky place in which to invest."

Obviously, there's a lot of politics connected with the dispute. Resnick's Roll International Corp. bought Fiji Water in 2004 from Canadian billionaire David Gilmour, who founded the water company in 1996.


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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
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