Brazil: Tax increase forces Ambev to close Rio Grande do Norte brewery

Brazil’s No. 1 beer maker Ambev announced on November 6 it will be closing its brewery in Natal, Rio Grande do Norte, Isto E Dinheiro reported.

According to the company, the decision was caused by a 29% increase in the local ICMS taxes on beer and an 18% increase in the ICMS taxes on soft drinks.

Imposto Sobre Operações Relativas à Circulação de Mercadorias e Serviços de Transporte Interestadual de Intermunicipal e de Comunicações is a value-added tax on sales and services and applies to the movement of goods, transportation and communication services, and to the supplying of any goods.

In an official release, Ambev said the operations will be shut up gradually by the end of this year. 300 jobs are expected to be lost at the plant and the closure will affect an estimated 15 thousand jobs in related industries.

08 November, 2015