Fiji Water reopens after agreeing to tax

Fiji Water shut down operations in the Pacific nation on Monday, saying the country was "increasingly unstable" and a risky place to do business.

But in a statement released from the US it said it had restarted production of the brand, which has soared in popularity since celebrities such as Justin Timberlake and Mary J. Blige have been seen holding its palm-adorned bottles.

"Following discussions today with Fijian officials, Fiji Water will re-open its bottling plant, effective Wednesday morning," the statement read.

"Through our discussions, we have also agreed to comply with Fiji's new water tax law."

The company added it was "committed to working with the Fijian government, and remained dedicated to helping the country's economy and its people".

A Los Angeles-based spokeswoman told AFP that the company would make no further comment on the issue.

On Monday Fiji Water president John Cochran condemned the regime's decision to hike taxes on the mineral water it extracts at an aquifer on the main island Viti Levu by 5,000 percent, from 0.3 to 15 Fijian cents (about eight US cents) a litre.

"This new tax is untenable and as a consequence, Fiji Water is left with no choice but to close our facility in Fiji," Cochran said at the time.

Cochran said the tax hike sent "a clear and unmistakable message to businesses operating in Fiji or looking to invest there -- the country is increasingly unstable, and is becoming a very risky place in which to invest".

The country's military strongman, leader Voreqe Bainimarama, who stole power in a bloodless 2006 coup and has since failed to hold democratic elections as expected, welcomed Fiji Water's turnaround.

"The only comment I can make is that... (this is) excellent news from Fiji Water and we want to thank Fiji Water for everything especially starting back the factory and bring back the workers," he told Fijian local radio.

The closure of Fiji Water operations would have cost the country one of its main exports and hundreds of jobs in a nation where tourism, sugar and remittances are the other major foreign exchange earners.

But the government has accused the company's Fiji subsidiary of selling the water to its US parent at an artificially low price to minimise tax payments and Bainimarama has said the firm was free to close its operation if it wished.

Last month the administration also deported a top US executive with the firm for allegedly interfering in internal affairs.

It is not Bainimarama's first corporate clash, with the government this year forcing News Limited, the Australian arm of Rupert Murdoch's News Corp, to sell the Fiji Times after a crackdown on foreign ownership of the media.

Bainimarama has also muzzled the media and opposition parties since taking power, saying he cannot implement reforms to prepare for elections now scheduled for 2014 if he is being constantly destabilised.

>> Fiji Water shuts operations in 'unstable' Pacific nation