Brazil: AmBev closes plant in Rio Grande Do Norte

AmBev, Latin America’s largest brewer, has announced the closure of its plant in Natal, blaming a rise in VAT rates on drinks, according to reports in Estadao and Exame.

“The decision was made after an analysis of the consequences that the increase in the Tax on Goods and Provision of Services (ICMS) on cold drinks, announced on the 30^th October, will bring to the company in the state”, explained the company.

The company argued that the new rates of 29% on beer and 18% on soft drinks introduced by the government of Rio Grande do Norte, combined with the ending of certain tax incentives, made the maintenance of production operations in the state unviable.

According to AmBev, operations will be wound down gradually with a view to full closure by the end of the year.

AmBev, which is part of the AB InBev group, currently operates 32 factories and two malting facilities in Brazil, according to its website.

Source: Estadao / Exame / Ambev