Coke bottler backs down on France tax protest plan

PARIS Thu Sep 8, 2011 11:45pm BST

Bottles of Coca-Cola are seen on the production line at their bottling plant in Clamart near Paris June 10, 2010. REUTERS/Jacky Naegelen

Bottles of Coca-Cola are seen on the production line at their bottling plant in Clamart near Paris June 10, 2010.

Credit: Reuters/Jacky Naegelen

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PARIS (Reuters) - Coca-Cola Enterprises (CCE.N) backed down from threats of a symbolic protest against a proposed French tax on soft drinks late Thursday evening, with a top executive apologising for a "communication error."

The company, which distributes Coke across Europe, will go ahead with plans to inject 17 million euros (15 million pounds) into its plant in southern France, its European head told French television, despite an earlier statement that it was reviewing the project to protest against the tax.

Coca-Cola Enterprises will also proceed with a party to celebrate the 40-year anniversary of the plant, though the date is not fixed yet, added Hubert Patricot, president of the European Group, Coca-Cola Enterprises.

Earlier on Thursday the company said it had cancelled the festivities, planned for September 19, saying the proposed tax unfairly singled out its products.

"We regret the communication error made this morning by our French team, which spread confusion about Coca-Cola's commitments in France," Patricot told news channel LCI.

"We confirm our investment of 17 million euros in our plant at Pennes-Mirabeau ... We will celebrate its 40th anniversary."

CCE also issued a statement reconfirming its commitment to France but said it still strongly opposed the "unjust" tax.

The embarrassing climbdown came after several French lawmakers and Labour Minister Xavier Bertrand criticised Coca-Cola Enterprises' threat, using words such as "blackmail."

Last month, France announced a set of austerity measures aimed at securing challenging deficit-reduction goals.

As part of the package, it announced a new tax on soft drinks as well as additional taxes on strong liquor and plans to raise tobacco prices.

Coca-Cola Enterprises, Western Europe's biggest bottler of Coca-Cola Co (KO.N) drinks, has five production sites in France where it employs around 3,000 people. The Les Pennes-Mirabeau plant near Marseille employs 203.

(Reporting By Dominique Vidalon and Lionel Laurent; Editing by David Holmes and Matthew Lewis)

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