Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
FILE PHOTO: A view shows the soft drinks production line at a plant of the Chernogolovka company in the town of Chernogolovka in the Moscow region, Russia July 28, 2022. REUTERS/Alexander Reshetnikov/File Photo

Russian soft drinks maker to cut back investments, hiring over new sugar tax

MOSCOW (Reuters) – Chernogolovka, a Russian soft drinks producer hoping to seize market share as Western competitors leave, said a proposed new sugary drinks tax had forced it to scale back investments next year and freeze hiring for 1,000 new jobs.

A parliamentary committee last week gave preliminary approval to budget proposals that would see excise duty levied on drinks with a certain sugar content at 7 roubles ($0.1135) per litre from Jan. 1, 2023.

“The company’s investment programme for 2023 will be reduced by 5 billion roubles, which will lead to the ‘freezing’ of 1,000 new jobs,” Chernogolovka said in a statement late Monday.

“This decision is due to economic uncertainty created by the introduction of an excise tax on non-alcoholic drinks, which forms the basis of the group’s product range,” Chernogolovka said.

The company said it was “extremely pessimistic” in its assessment of the soft drinks market for 2023-25, fearing production could fall by 20% from current levels.

“The decision will affect the company’s major investment project in the Moscow region, a plant construction project in the Volga region and a production expansion project in Krasnodar region,” it said.

Chernogolovka told Reuters in August it was aiming for a 50% share of Russia’s nearly $9 billion soft drinks market, as Coca-Cola Co was reducing operations. The company started making Cola Chernogolovka in May.

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

PepsiCo and Coca-Cola production continued for months after the companies pledged a halt in March after Russia sent tens of thousands of troops into Ukraine.

Chernogolovka was also dealt a blow last week when an intellectual property court ruled its “Fantola” brand violated Coca-Cola’s “Fanta” trademark, Interfax reported, nullifying an earlier decision by Rospatent, the government’s intellectual property agency.

That legal dispute began before the Ukraine crisis.

($1 = 61.7000 roubles)


(Reporting by Olga Popova and Alexander Marrow; Editing by Mark Potter)


Recent Post: