Mineral water giant pulls plug on Fiji

Pop stars, celebrities, and even the US President may have to find a new tipple after mineral water company Fiji Water announced it was pulling out of the South Pacific country, because of disputes with the military junta.

The firm said it had decided to close its only factory, in the Yaqara Valley on the main island of Viti Levu, with the loss of 400 jobs, after the government announced a new tax of 15 Fijian cents (about 10c) a litre on companies extracting more than 3.5 million litres of water a month. Previously, the tax rate was one third of one cent.

"This new tax is untenable and as a consequence, Fiji Water is left with no choice but to close our facility," the company said.

The new tax sent "a clear and unmistakable message to businesses operating in Fiji or looking to invest there: the country is increasingly unstable and a very risky place in which to invest."

Orders from suppliers have been put on hold by Fiji Water, which produces the most popular brand of imported water in the US.

It sells its highly-recognisable bottles in 40 countries, and claims to be responsible for 20 per cent of Fiji's exports and 3 per cent of its GDP.

The firm has been clashing with Fiji's military regime, which took power in a 2006 coup.

Last month, its executive David Roth was deported from the country after self-appointed Prime Minister Commodore Frank Bainimarama accused him of acting "in a manner prejudicial to good governance and public order".

If Fiji Water's decision to pull out of the nation stands, it is difficult to see how the product can survive.

The trendy brand is built on the allegedly unique and life-enhancing properties of the underground spring from which it comes, which is said to be particularly pure.

That marketing pitch has been enough to turn Fiji Water into a favourite of the celebrity classes, drunk by everyone from Scarlett Johansson and Justin Timberlake to Nicole Kidman and the Obamas.

Fiji Water has styled itself as an eco-friendly product, claiming it pays to offset all the carbon emissions which come from transporting square plastic bottles from one of the world's most remote locations to the refrigerators of major cities.

Al Gore swigs it while delivering speeches about global warming, while the firm's owners are Los Angeles philanthropists Lynda and Stewart Resnick, who have given millions of dollars to progressive causes and Democratic Party politicians.

Critics have scoffed at the notion that bottled mineral water can be environmentally responsible, and point out that many Fijians have no access to clean drinking water, and suffer from diseases such as typhoid.

Others have raised eyebrows at the firm's corporate structure - court records show that in 2008 it was owned by an entity in the tax haven of Luxembourg, though some assets have recently been transferred to Switzerland.

Despite its present hostility to Fiji's taxman, the firm has enjoyed tax-exempt status on corporate income since it was founded in 1995.

Fiji is meanwhile suffering because of economic sanctions against its government from several countries.

Its rulers have fallen out with many overseas investors, including Rupert Murdoch's News Corp, which in September sold its controlling stake in Fiji's main newspaper because of ownership limits on foreign media companies.

Yesterday, Mr Bainimarama began his own PR offensive, claiming that "as usual Fiji Water has adopted tactics that demonstrate Fiji Water does not care about Fiji or Fijians".

NATURALLY FROM FIJI

*Fiji Water is sold in 40 countries.

*The firm has one factory in the Yaqara Valley on the main island of Viti Levu, employing 400 people.

*It claims to be responsible for 20 per cent of Fiji's exports and 3 per cent of its GDP.

*Fiji Water has also aggressively styled itself as an eco-friendly product, claiming that it pays to offset all carbon emissions.

*Fiji Water is a favourite of the celebrity classes, drunk by everyone from Scarlett Johansson and Justin Timberlake to Nicole Kidman.

*The firm's owners are LA-based philanthropists who support the Democratic Party of President Barack Obama

- Independent