• 0 Posts
  • 5 Comments
Joined 1 year ago
cake
Cake day: July 22nd, 2023

help-circle
  • The company routinely shifted production of concentrate to countries with favourable tax rates

    Manufacturing is different than IP transfers.

    the US parent company that owns the iconic brands. By controlling how much the subsidiaries must pay other parts of the Coke network for use of the brands and marketing, and by setting the prices they can charge bottlers, Coke itself in effect decided their profitability, the court heard

    IP is owned by the US. What they’re describing is transfer pricing. Subsidiaries are owned by coke hence by definition coke sets the prices under which the US charges for their IP. It’s tax advantageous to charge a low amount to shift profits to low tax jurisdictions.

    Numbers look massive but overall not large enough. Coke is gigantic and the dispute spans multiple years. The IRS hasn’t always covered themselves in glory and they may still fumble a technical aspect on the burden of proof.

    Interesting to see it unfold but coke has a history of environmental, business and humane malpractices. This is just another outcome of such business model.


  • The intangible property for coke is a secret recipe that is preserved in some vault in the US. There’s no transfer of IP here and that’s not what’s in dispute.

    The facts are centred around the profitability of concentrate producers that earn the super profits. Operating entities and the US makes a slim margin.

    You can read a better informed analysis here.