Sweets tax | Fazer still can’t say whether it will build a chocolate factory in Lahti – Against the backdrop of the government’s tax decision

Food manufacturer In the spring, Fazer postponed the decision to build a chocolate factory in Lahti, says the CEO of Fazer Makeiset business Lara Saulo.

“That’s when we decided to take overtime, because a lot is changing around us,” he says.

It would be a project worth around half a billion euros. Chocolate production would be moved from Vantaa to Lahti.

Ilta-Sanomat reports on Friday, that Fazer decided in the spring to freeze the chocolate factory plan “due to political unpredictability and uncertainty”. The group’s communications director told about it Josephine Mickwitz.

Petteri Orpon The (kok) government decided to raise the VAT on sweets and chocolate from 14% to 25.5% in its spring budget rush. of IS information by an increase is planned for next year.

Fazer already told in April, that it is worried about the decision of the tax authorities to raise sweets to the highest VAT rate. At that time, the company did not take a position on how the matter affects the company’s business or the decision to invest in a new factory.

Saulo says that the increase in value added tax would “significantly” affect the price of the final product. Fazer is not yet able to estimate what the increase would mean in terms of demand for different categories and how the tax would affect sales.

“That’s why we wanted to take the extra time and assess the situation, analyze the market and our options.”

But no new decisions have been made since the matter was made public in the spring, says Saulo.

The investment decision is also influenced by, for example, consumer behavior, changes in demand and prices of raw materials.

“Cocoa has been at quite high prices, and of course these types of things must be taken into account in the decision. But yes this [arvonlisävero] was quite a significant question mark for us, and it came very unexpectedly. We found it difficult to predict, which of course makes it difficult from a business perspective.”

The company already estimated in April that it is possible that when the VAT rate rises, consumption will shift to cheaper products, i.e. products often made abroad.

According to Saulo, such a big decision on factory investment would not be postponed as a message to the decision-makers, but it is a genuine financial question.

Government announced in the spring that it would take into account the recommendation of the Health and Welfare Institute (THL) on health-based taxation in its taxation decisions. In addition, the government evaluate raising the VAT rate on sweets will increase annual tax revenues by tens of millions of euros.

THL your line in March that it is in favor of tightening the taxation of foods that are harmful to health. According to the institution, the population still receives too much sugar, salt and hard fat in terms of health.

According to THL, however, the government’s tax decision is not According to THL’s proposal and it does not encourage manufacturers to develop, for example, products with less sugar.

In Fazer’s opinion, the government’s proposal significantly distorts competition in delicacy products and contradicts the EU’s principle of neutrality related to value added taxation. In Fazer’s opinion, products containing a lot of salt and fat have been completely ignored in the presentation.

Saulo says that the company is still discussing the tax with the decision-makers.

Confectionery is an important product category for Fazer. About half of the group’s turnover, about 500 million, comes from sweets. A big part of it is chocolate.

The group’s comparable operating result last year was 66.9 million and the turnover was almost 1.2 billion euros. The company has almost 3,300 employees in Finland.

Correction 5.7. 10:11 p.m.: Fazer Group’s turnover last year was almost 1.2 billion euros, not 1.1 billion euros. It has just under 3,300 employees in Finland, not 3,200.