Coca-Cola issues jobs warning over Brexit

Coca-Cola has told the government it will be forced to “review” its Irish operations if border tariffs are introduced following Brexit. The drinks company, which employs 1,750 people at six sites on the island of Ireland, warned Paschal Donohoe, the Irish finance minister, that Brexit could threaten its investment.

“The uncertainty of Brexit compounds the enormous pressure the [sugar] tax will have on our business and threatens our ability to continue to invest in our operations here, and to maintain and grow our direct and indirect employment levels,” it said.

The claim is in a letter from the company, dated July 28, which is signed by Petre Sandru, country manager, and Matthieu Seguin, general manager. It outlines a number of “serious business challenges”.

In the correspondence, obtained through a freedom of information request, Coca-Cola warns Donohoe that “the introduction of border tariffs or custom arrangements based on the WTO [World Trade Organisation] tariffs would be extremely detrimental to our business and could require us to review our operating model in Ireland”.

WTO tariffs will apply to all trade between the UK and EU following Brexit unless the British government can agree a new trade deal. Coca-Cola believes its all-island business would leave it particularly exposed to high tariffs for exports from Ireland to the UK.

Trade is also likely to be more cumbersome. Customs authorities in Ireland have indicated that up to 8% of freight between the Republic and Northern Ireland could be subject to checks after Brexit. This could cause delays of up to an hour for some deliveries.

Diageo has suggested it would cost €100 more to transport each lorry-load of Guinness across the border following Brexit.

Coca-Cola, which opened its first bottling company in the Republic in 1952 and its first factory in Northern Ireland in 1939, told Donohoe that uncertainty around a proposed sugar tax was “causing significant stress to [its] business at a time when [it is] also trying to put in place a range of mitigation strategies for the potential impact of Brexit”.

The company said the scale of the proposed sugar tax was so high that it will be forced to “pass on the cost” to customers, resulting in “higher prices for consumers at a time when inflation is rising and consumer spending is slowing”.

Coca-Cola asked Donohoe for a meeting at his “earliest convenience”.
On August 31, the minister’s diary secretary responded that Donohoe was “not available to meet at this time”.

This weekend Coca-Cola played down the threat to review its operations in Ireland. In a statement, the company said it had a “record of growth here and remained fully committed to our extensive operations”.

“Like all organisations with an all-island business, we are closely following the Brexit negotiations. We continue to talk to elected officials and their representatives on both sides of the border to ensure the potential impacts on industry are known and understood and receive due consideration,” it said.

“Until negotiations conclude we won’t know what, if any, impact Brexit will have on our business, but we continue to put in place mitigation strategies.”

Coca-Cola, which has operations in Co Antrim, Dublin, Co Kildare, Co Louth, Co Mayo and Co Wexford, has stepped up its lobbying of Irish politicians. The lobbying register records dozens of meetings involving the company.


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