Venezuela Shuts Down Coca-Cola Operations
Associated Press
February 16, 2005

CARACAS, Venezuela - Venezuela's tax agency ordered a 48-hour closing of Coca-Cola Co.'s bottling plants and distribution centers across the country Tuesday as a penalty for allegedly failing to follow tax rules.

Tax officials said they would close the U.S. company's four bottling units and 34 distribution centers in Venezuela controlled by Coca-Cola Femsa S.A.

The company had failed to issue receipts for its sales and keep its books in order, said Selma Rendon, a top tax agency official.

"In this process they haven't been as forthcoming," as expected, she said.

The Coca-Cola Co. in Atlanta had no comment, referring questions to Femsa. "They're a bottler separate from us," spokesman Ben Deutsch said.

Femsa officials could not be immediately reached for comment.

Coca-Cola's closing is the latest example of the Venezuelan government's aggressive "zero evasion" campaign that has targeted both local and international companies.

On Feb. 5, tax officials also ordered all McDonald's restaurants in the South American country closed for three days, citing similar tax violations.

Other businesses that have been temporarily closed by the tax bureau include Lucent Technologies, supermarkets and mall shops.

The Venezuelan government managed to collect nearly $13 billion in taxes last year, a 50 percent increase from the previous year.

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