As island threatens tax hikes, Fiji Water may close operations, disrupt supply chain Bottled water is a huge market in the U.S. and around the globe. One popular maker, Fiji Water, is in a heated dispute with the military government of the South Pacific country over proposed tax increases that could potentially disrupt its supply chain and stymie manufacturing.

Yesterday, the company announced it will close operations on the island responsible for its only product, bottled water. Fiji Water also plans to cancel orders from suppliers and halt some construction projects during the dispute. While the company contends that it will continue to operate in the country if the tax hike is thrown out, it also faces major supply issues if it should close: all of its bottled water comes from a remote part of the island.

The suggested tax increase - from .33 cent to 15 cents a liter - leaves the company "no choice but to close our facility," John Cochran, the company's president, declared. If the company were to continue operations on the island, the hefty tax hike would make it nearly impossible to post profits without shifting the rising costs to consumers. The company's supply chain has essentially stopped as it awaits diplomatic moves from the island nation's government.

Fiji Water hopes the government will cave in on the tax rate changes - as it did two years ago when similar measures were proposed - so it can continue operations as normal, save money and restart its supply chain.
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