Brazil: PepsiCo closes plant in Manaus

Global snacks and drinks giant PepsiCo has announced the closure of its factory in the Free Economic Zone of Manaus, reportedly after changes to taxes in the soft drinks sector.

According to Exame, PepsiCo said that the decision to leave the region “was taken with the goal of efficiently managing our operations throughout Brazil and positioning the company for long-term growth, regardless of the recent change in the tax regime”.

The change in the tax incentives occurred this September, when the government announced a decrease in taxes for the manufacture of drinks concentrates, so the incentives to operate in the tax-free Free Economic Zone of Manaus were reduced.

The company claims that production will be redistributed to their other plants that produce the same drinks, but the Manaus plant was the only one in Brazil that manufactured concentrates.

According to Exame, industry representatives said there was a risk that other multinationals might follow in PepsiCo’s footsteps and leave the Manaus Free Economic Zone.

Source: Exame