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Fiji Water shuts operations in Pacific nation

SUVA, Nov 29 – US-owned bottled water giant Fiji Water shut down operations in the military-ruled Pacific nation Monday, branding it "increasingly unstable" and a risky place to do business.

Fiji Water president John Cochran condemned the government\’s decision last week to hike taxes on the mineral water it extracts at an aquifer on the main island Viti Levu by 5,000 percent, from 0.3 to 15 cents a litre.

"This new tax is untenable and as a consequence, Fiji Water is left with no choice but to close our facility in Fiji," he said in a statement, adding the loss of one of Fiji\’s main exporters would cost hundreds local jobs.

Cochran said the government action was effectively "a taking of our business".

"(It) sends a clear and unmistakable message to businesses operating in Fiji or looking to invest there — the country is increasingly unstable, and is becoming a very risky place in which to invest," he said.

The remarks echo sentiments expressed by News Limited, the Australian arm of Rupert Murdoch\’s News Corp., when the regime introduced foreign ownership restrictions earlier this year which forced it to sell the Fiji Times.

They are likely to rankle military strongman Voreqe Bainimarama, who has sought to increase foreign investment since seizing power in a 2006 coup. There was no immediate comment from the government.

Fiji Water has undergone rapid expansion in the United States in recent years, where it rivals Evian as the top imported bottled water.

Cochran said it generated 70 million dollars in annual exports for Fiji, where the Asian Development Bank estimates 40 percent of the 850,000 population live below the poverty line.

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He said the company employed almost 400 people in its bottling plant next to a deep aquifer, where company marketing says its operating methods ensure the final product is untouched by human hands.

Cochran said Fiji Water would also put on hold several large construction projects in Fiji and cancel contracts with local suppliers.

The company\’s profile has skyrocketed as celebrities such as Justin Timberlake and Mary J. Blige have been photographed downing the drink.

The company\’s website claims US President Barack Obama drank Fiji Water on election night in 2008 and company executives have estimated the brand generates 20 percent of Fiji\’s exports.

But its success has created waves with Bainimarama\’s regime, which has accused the company\’s Fiji subsidiary of selling the product to its US parent at an artificially low price to minimise tax payments.

The government attempted to impose an extra levy on bottled water exports in 2008 but backed down in the face of industry pressure.

There were further ructions earlier this month, when a top US executive with the company, David Roth, was deported for allegedly interfering in internal affairs.

Bainimarama\’s government has also expelled Australia\’s and New Zealand\’s diplomatic envoys since taking power, as well as a number of expatriate Australian newspaper executives.

Government information secretary Sharon Smith Johns told reporters after Roth\’s deportation that the action "doesn\’t change government\’s commitment to creating positive business and investor confidence".

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The international community, led by Australia and New Zealand, has urged Bainimarama to restore democracy.

However, he broke a promise to hold elections in 2009 and has since said there will be no popular vote before 2014.

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