PepsiCo and Nestle have announced that they will invest $6 billion on expanding their food and beverage businesses in Mexico. The manufacturer of Pepsi soft drinks plans to spend $5 billion over the next five years on growing its operations in Latin America's second largest economy.
The company gave the country’s growing middle classes and opportunities for long-term growth as the primary reasons for the strategy.
Meanwhile, Nestle announced an investment of $1 billion over the same period - the Group plans to build sites to include a pet food factory in Guanajuato state.
Earlier this month in a move to increase its government’s revenues, Mexico placed a one-peso-per-litre tax on soft drinks, an 8% tax on high-calorie products and a 16% tax on pet food.
It is understood that the new taxes are not deterring food and drinks manufacturers from expanding in the country with analysts expecting brands to pass on the higher taxes to consumers.
“Mexico is an important market for PepsiCo and we believe there is tremendous opportunity for growth and expansion throughout the country,” said PepsiCo Mexico President Pedro Padierna. “This investment reflects our confidence in Mexico’s future."
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