Plants could be closed if proposed charge is implemented
Government aims to reduce sugar consumption, tackle obesity
Coca-Cola Beverages Africa, the bottling joint venture between the U.S. soft-drink maker and brewer SABMiller Plc, may close South African plants and see profit in the country more than halve if the government pushes ahead with a proposed sugar tax.
Economic Development Minister Ebrahim Patel has welcomed commitments between the Coca-Cola Beverages Africa (CCBA) merger parties - SABMiller Plc, The Coca-Cola Company and Gutsche Family Investments, as well as the South African government.
The commitments will be recommended to the Competition Tribunal in connection with the proposed creation of Africa's largest soft drink beverage bottling operation.
SABMiller and Coca-Cola have agreed with the South African government to win approval for a deal to combine their soft-drink operations.
The agreement with the South African Ministry of Economic Development includes a three-year freeze on layoffs and the companies investing 800 million rand ($54 million) to support small South African businesses.
A majority shareholder in Nigeria’s largest juice and dairy company, Chi Limited, Tropical General Investment (TGI) Group, on January 30, 2016 sold 40 percent of its stake to the Coca-Cola company. This deal signals Coca Cola’s plan to expand across Africa by 2020 and redouble its effort to expand beyond soda as its soda sales is low.
This follows global reports that the international drinks company had promised to stop all business dealings with subsidiaries that were involved in land grabs, where land is taken from poor people in developing countries without their consent.
Coca-Cola, under its Swazi subsidiary Conco, produces drinks concentrate using sugar. It makes up as much as 40 percent of the Swaziland's gross domestic product (GDP), but it is said to be exempt from paying full taxes.