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Nestlé says no plan to close Philippine coffee plant

Nestlé SA's Philippine arm said Sept. 7 that it does not intend to close any of its manufacturing facilities in the country, following reports that the Swiss food giant will close a coffee processing plant unless it receives tax incentives.

"Coffee under our Nescafé brand remains to be a core pillar for us, and we are committed to support the local coffee industry and our coffee farmers to growth," the company said in a statement posted on its website. "We have been operating in the Philippines for 107 years now, and we look forward to doing business here in the next 100 years. Nestlé is here to stay."

The Nikkei Asian Review on Sept. 5 quoted a company official as saying that Nestlé would close its Philippine plant and move to neighboring countries like Indonesia, Malaysia or Vietnam if a second wave of tax reforms would remove the company's tax incentives.

The first round of tax reforms, which was imposed in January, included a tax on sweetened beverages that has increased the price of a sachet of Nestlé's powdered fruit juice drink brand Nesfruta to 15 pesos from 9 pesos, according to the report. The brand's sales volume has dropped 30% this year due to the change.

In August, Mexico's Coca-Cola Coca-Cola FEMSA SAB de CV sold its 51% stake in its Philippine operations back to Coca-Cola Co. in response to supply problems, the sugar tax and labor issues.

As of Sept. 7, US$1 was equivalent to 53.77 Philippine pesos.