Pepsi plant's closure due to cost cutting
Pepsi is closing its Baltimore bottling plant because it can save money by making soft drinks elsewhere. I suppose we should have expected the company to complain about Baltimore's 2-cent bottled-beverage tax, which affected mainly retailers and consumers and which expires in a couple years. Pepsi's Frito-Lay division, which has a snack plant in Harford County, got Maryland's snack tax abolished in the 1990s and helped fend off a snack-tax comeback in 2004.
But the Baltimore closure seems like a streamlining move, pure and simple. Complaints about the bottle tax are just theater. Like Coke, Pepsi is putting more effort into juices and other noncarbonated drinks. In 2009 it agreed to take over Pepsi Bottling, which, as the company noted in the press release, set the stage for manufacturing consolidation and cost cutting. Pepsi is also closing a bottling operation in Maine.
Comments
Once again, the Sun provides political shelter for the tax hungry city government to absolve them from the inevitable job loss that they've caused. Who will be left to fund the city when all business has fled?
Posted by: Kevin R. | January 11, 2011 12:26 PM
Kevin, look up tax incidence and price elasticity.
Posted by: Josh Dowlut | January 11, 2011 12:49 PM
Kristine Hinck, a Pepsi company spokeswoman, said: "Given the climate, making a beverage in a city where there is a beverage tax certainly doesn't help."
The bottom line is, does the Baltimore City government make this a good place to do business?
So I repeat. Who will be left to fund the city when all business has fled?
Posted by: Kevin R. | January 11, 2011 5:54 PM